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TMI Blog2019 (12) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... . Varkey, Judicial Member For the Appellant : Shri S.K. Tulsian, Advocate For the Respondent : Dr. A.K. Nayak, CIT (D.R.) ORDER PER SHRI P.M. JAGTAP, VICE-PRESIDENT:- This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax(Appeals)-1, Kolkata dated 25.01.2018 and the solitary issue involved therein relates to the addition of ₹ 15,67,92,000/- made by the Assessing Officer under section 68 of the Income Tax Act, 1961, which is further enhanced by the ld. CIT(Appeals) by ₹ 27,80,000/-. 2. The assessee in the present case is a Company, which is engaged in the business of share trading and investment. The return of income for the year under consideration was filed by the assessee on 21.09.2014 declaring total income at NIL . During the course of assessment proceedings, the assessee was called upon by the Assessing Officer to explain the source of share premium amount of ₹ 15,67,92,000/- received during the year under consideration. As noted by the Assessing Officer in the assessment order, the assessee, however, fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered Accountants wherein applying the Net Assets Method the value per share was arrived at ₹ 572.26. As such, the premium of ₹ 564/- per share was charged taking into consideration the Net Worth of the company. Since the said certificate issued by M/s. Shanna Naresh and Co., Chartered Accountants could not be produced before the learned AO due to paucity of time, it is humbly requested before your goodself to admit the same by virtue of Rule 46A of the Rules. Rule 46A of the Income Tax Rules, 1962 regulates the production of additional evidence before Commissioner (Appeals). It provides that the appellant shall not be entitled to produce before the Commissioner (Appeals) any evidence, whether oral or documentary, other than evidence produced by him before the Assessing Officer, except in the following circumstances: a. The Assessing Officer has refused to admit evidence which ought to have been admitted. b. The appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer. c. The appellant was prevented by sufficient cause f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 15,67,92,000/- made u/s.68 of the Act since the basis of premium stands explained and all the ingredients of section 68 of the Act stands established by the appellant . 4. The above submissions made by the assessee along with the supporting documentary evidence were forwarded by the ld. CIT(Appeals) to the Assessing Officer for verification. The Assessing Officer in turn submitted the remand report to the ld. CIT(Appeals) giving his comments as under:- Ground No. 1- Addition u/s.68 of the Act - ₹ 15,67,92,000/- Para No.1 Facts on record - no comments. Para No.2 Facts on record - no comments. Para No.3- The Assessing Officer has issued letters u/s.133(6) to the alleged share- subscribers at the given address. But there was no compliance with respect to the notice u/s.133(6) of the Act. The fact was brought to the notice of the assessee. Tne assessee did not furnish any documents so as to establish the creditworthiness/source of fund in the hands of the subscribers. Para No. 4- It is fact that the Assessing Officer has added back the amount of ₹ 15,67,92, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/- [after adjusting negative balance, of Reserve Surplus (cumulative losses) of ₹ 65,91,54,035] and investment of ₹ 139,76,54,438/- but did not earn any Revenue from operation. Para No.7 -Reply to this paragraph has already been noted in comment against para No. 6 above. However, the assessee's argument regarding submission of bank details and confirmatory letters from the investors is not factually correct. Regarding the decisions of various Hon'ble Courts (continuation of the para No, 7), it is submitted that the assessee had only submitted the names, addresses and PAN of the investors. But the assessee did not substantiate the genuineness of the transactions as none of the alleged investors had replied to letters issued u/s.133(6) to examine their creditworthiness/source of fund. In this respect, the observation of the Hon'ble jurisdictional High Court in the case of M/s. Rajmandir Estates (P) Ltd. [386 ITR 162] is considered to be very much pertinent. In that case Their lordship held that apparently, the identities of the investors are known but, having regard to the facts of the case, the creditworthiness of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the sides and also perused the relevant material available on record. The main contention raised by the ld. Counsel for the assessee before us is that proper and sufficient opportunity of being heard on this issue was not given either by the Assessing Officer or even by the ld. CIT(Appeals). He has submitted that during the course of original assessment proceedings, proper and sufficient opportunity was not given by the Assessing Officer to the assessee to explain the relevant cash credit representing share premium amount in terms of section 68 by producing the relevant documentary evidence and when such documentary evidence filed by the assessee during the course of appellate proceedings before the ld. CIT(Appeals) along with the written submission was forwarded by the ld. CIT(Appeals) to the Assessing Officer for verification, the Assessing Officer did not give proper and sufficient opportunity to the assessee even during the course of remand proceedings to support and substantiate its case on the issue. He has invited our attention to the relevant portion of the remand report submitted by the Assessing Officer to the ld. CIT(Appeals) as extracted in the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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