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TMI Blog2020 (2) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... statements were recorded u/s 131 on oath, the AO cannot make an allegation in the assessment order as to why they have invested in such non-descript company. So far as the allegation of the AO that the bank account show back to back entries is concerned, we find merit in the argument of the ld. Counsel that the investor companies have withdrawn money from companies where funds were invested earlier and they invested money in the assessee company in the shape of preference shares and, therefore, this prudent financial planning should not be viewed adversely and, rather, it supports the case of the assessee that there was source of funds invested by the investor company in the shares of the assessee company. We further find the various inferences/statements/materials which were the basis for the addition by the AO were never confronted to the assessee before being used by the AO against the assessee. From the various details furnished by the assessee, we find the assessee, in the instant case, has discharged the onus cast on it by producing the directors of the investor companies whose statements were recorded and who have admitted to have invested in the assessee company. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,16,000/-. During the course of assessment proceedings, the AO noted that the assessee has issued 8% non-cumulative preferential shares of its companies to below mentioned companies at a premium of ₹ 90/- per share, the details of which are as under:- Subscriber Name Addition during the year Share Capital @ ₹ 10/- per share Share Premium @ ₹ 90/- per share Cindy Goods Supply Pvt. Ltd. 14,50,00,000/- 1,45,00,000/- 13,05,00,000/- M/s Pabla Leasing Finance Pvt. Ltd. 15,00,00,000/- 1,50,00,000/- 13,50,00,000/- 29,50,00,000/- 2,95,00,000/- 26,55,00,000/- 4. He, therefore, asked the assessee to furnish the details of share capital/share premium and source of investment. In response to the same, the assessee submitted copies of share certificates, copy of bank statements, income-tax return and audited balance sheet. It was submitted that all the share subscription money wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d., M/s Pabla Leasing Finance Pvt. Ltd. and Intellectual Securities Pvt. Ltd., are used by different accommodation entry operators to facilitate accommodation entry operators. Further, the Directors of these companies have admitted that they were involved in providing accommodation entries on commission basis to IITL Nimbus group of companies. 8. To verify the source of the investment of the above companies, the AO obtained information u/s 133(6) of the Act from the respective banks and noted that there are back to back transactions of same amount i.e., credit and debit of the same amount on the same dates/following dates with several other deposits and withdrawals. The AO, therefore, confronted the assessee and asked him to explain the identity and credit worthiness of the investor companies and genuineness of the transactions. Rejecting the various explanations given by the assessee and relying on the decision of the Hon ble Supreme Court in the case of B. Kishore Kumar vs. DCIT , the AO made addition of ₹ 29,50,00,000/- to the total income of the assessee being the amount of share capital and share premium of ₹ 15 crore received from M/s Pabla Leasing Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned assessment order. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in assuming jurisdiction and framing the impugned assessment order u/s 153A, is bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making aggregate addition of ₹ 29,50,00,000/- on account of non cumulative redeemable preference share capital/share premium by treating it as alleged unexplained transaction u/s 68 of the Act, more so when no incriminating material has been found as a result of search and impugned addition has been made by recording incorrect facts and findings and without providing the entire adverse material on record and without observing the principles of natural justice. 4. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in aggregate making addition of ₹ 29,50,00,000/- on account of non cumulative redeemable preference share capital/share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumulative redeemable preference share capital/share premium u/s 68 of the Act, is bad in law and against the facts and circumstances of the case. 5. That in any case and in any view of the matter, addition made in the impugned assessment order are beyond jurisdiction and illegal also for the reason that these could not have been made since no incriminating material has been found as a result of search. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned assessment order passed by Ld. AO without obtaining the valid approval u/s 153D as per law. 7. That having regard to the facts and circumstances of the case, Ld.CIT(A) has erred in law and on facts in not reversing the action of Ld.AO in charging interest u/s 234A, 234B, 234C 234D of Income Tax Act, 1961. 8. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 12. The ld. Counsel for the assessee, at the time of hearing, fairly conceded that grounds of appeal N. 1 and 2 by the assessee for both the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the assessee company showing redemption of the said amount to the investor company. Referring to pages 175 to 178 of the paper book, he drew the attention of the Bench to the order passed u/s 147/143(3) in the case of M/s Pabla Leasing Finance Pvt. Ltd., which substantiates its identity. Referring to page 513 of the paper book, he drew the attention of Bench to the order passed u/s 144 of the Act in the case of M/s Pabla Leasing Finance Pvt. Ltd., wherein the AO has determined the total income of the assessee at ₹ 47,59,260/- as against the returned income of ₹ 30,85,540/-. Referring to page 264 of the paper book, he drew the attention of the Bench to the notice issued by the AO u/s 133(6) to M/s Pabla Leasing Finance Pvt. Ltd. Referring to page 265 to 334 of the paper book, he drew the attention of the Bench to the various documents filed by the said company before the AO substantiating the identity and credit worthiness of the investor company and the genuineness of the transaction. Referring to page 335 to 337 of the paper book, he drew the attention of the Bench to the statement of Shri Virendra Tripathy, Managing Director of M/s Pabla Leasing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iri Financial Services (P) Ltd. in A.Y. 2014-15 is concerned, the ld. Counsel for the assessee submitted that the assessee has filed the requisite documents such as the copy of bank statement of the investor company, their audited accounts, income-tax return acknowledgement, Form 2 filed with the ROC, etc., to substantiate the identity and the credit worthiness of the investor company and genuineness of the transaction. Referring to paper book page 254, he submitted that Giri Financial Services (P) Ltd., is registered with RBI as a NBFC w.e.f. 16.02.2001. He submitted that in response to notice u/s 133(6), the director of the company Mr. Anshul Mittal had appeared and filed relevant document and he had confirmed to have invested in the assessee company. He submitted that in the A.Y. 2015-16, the AO, in the order passed u/s 153A/143(3) has accepted a sum of ₹ 11.34 crores towards share capital and share premium in the assessee company and no adverse view has been taken. Further, the investor company is showing continuous substantial income and, therefore, no addition is called for u/s 68 of the Act when the assessee has proved the three ingredients of section 68 of the IT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us pages of the paper book, he submitted that these companies have substantial income and the allegation of the AO that these companies are mere paper companies without doing any business is contrary to facts. Referring to page 507 to 512 of the paper book, he drew the attention of the Bench to the copy of the assessment order passed u/s 143(3) in the case of M/s Pabla Leasing Finance Pvt. Ltd., for A.Y. 2014-15 and submitted that the AO in the assessment order has considered the opening investment of ₹ 41.20 crores as on 01.04.2013 and ₹ 42.70 crores as on 31.03.2014 for the purpose of computation of disallowance u/s 14A. 19. So far as the allegation of the AO that Director of the assessee company was required to be produced for recording his statement and the allegation that no investor would invest crores of rupees in a non-listed company without any return and the recipient company even does not have the particulars/contact details of such investments and failed to justify the share premium by filing valuation report/documents, etc., is concerned, he submitted that the director of the investor company was not only produced, but his statement was recorded on oat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een made:- In the case of M/s Nimbus India Ltd. For AY 2013-14 and 2014-15 S.No. Particulars AY 2012-13 AY 2013-14 AY 2014-15 AY 2015-16 1. M/s Pabla Leasing Finance Ltd. (PB 173 of PB for Y 2013-14) ₹ 15,00,00,000/- ₹ 2,51,00,000/- ₹ 2,64,60,000/- (Preferential Share Capital) ₹ 11,34,00,000/- (Equity Share Capital) Accepted and no addition made 2. M/s Cindy Goods Supply Pvt. Ltd. 164 of PB for AY 2013-14 ₹ 3,50,00,000/- Accepted and no addition made ₹ 14,50,00,000/- ₹ 2,75,00,000/- Accepted and no addition made 3. M/s Giri Financial Services Pvt. Ltd. (PB 255 of PB for AY 2014-15) - - ₹ 18,00,00,000/- ₹ 11,34,00,000/- accepted and no addition made Assessment status ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease (P) Ltd (18 taxmann.com 217, 206 Taxman 207. 342 ITR 169. 252 CTR 187); 13. CIT Vs Ultra Modern Exports (P.) Ltd (40 taxmann.com 458, 220 Taxman 165); 14. CIT Vs Frostair (P.) Ltd (26 taxmann.com 11, 210 Taxman 221); 15. CIT Vs N R Portfolio Pvt Ltd [2014] 42 taxmann.com 339 (Delhi)/[2014] 222 Taxman 157 (Delhi)(MAG)/[2014] 264 CTR 258 (Delhi); 16. CIT Vs Empire Builtech (P.) Ltd (366 ITR 110); 17. CIT Vs Focus Exports (P.) Ltd (51 taxmann.com 46 (Delhi)/[2015] 228 Taxman 88); 18. PCIT Vs Bikram Singh [2017] 85 taxmann.com 104 (Delhi)/[2017] 250 Taxman 273 (Delhi)/[2017] 399 ITR 407 (Delhi); 19. Rick Lunsford Trade Investment Ltd Vs CIT [2016] 385 ITR 399 (Cal); 20. Rick Lunsford Trade Investment Ltd Vs CIT [2016-TIOL-207-SC-IT] (Supreme Court) 23. The ld. Counsel for the assessee, in his rejoinder, submitted that the various decisions relied on the ld. DR are distinguishable and not applicable to the facts of the present case. So far as the decision of the Hon ble Supreme Court in the case of NRA Iron Steel (P) Ltd. (supra) is concerned, he submitted that the said decision does not apply to the facts of the present case, since the said decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sheet, their assessments have been completed u/s 143(3) and the respective AO s have considered their investment for computation of disallowance u/s 14A r.w. Rule 8D, the directors of the investor companies appeared before the AO and their statements were recorded and they have admitted to have invested in the assessee company and since the amounts were subsequently redeemed to the investor companies much prior to the date of search, therefore, under the facts and circumstances of this case, the addition made by the AO and sustained by the CIT(A) is not justified. 26. We have heard the rival arguments made by both the sides, perused the orders of the AO, CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO, in the instant case, made addition of ₹ 29,50,00,000/- to the total income of the assessee being the amount of ₹ 14,50,00,000/- from M/s Cindy Goods Supply Pvt. Ltd., and ₹ 15 crores from M/s Pabla Leasing Finance Pvt. Ltd., on account of non-genuine share premium/share capital. Similarly for A.Y. 2014-15, the AO made an addition of ₹ 20,51,00,000/- being an amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 2014-15 13,622 229 2015-16 11,81,118 Giri Financial Services Pvt. Ltd. Paper Book Page A.Y. Income 351 2013-14 53,91,176 361 2014-15 9,16,779 371 2015-16 1,48,77,629 384 2016-17 13,40,307 28. A perusal of the submission filed by the assessee which has been reproduced at para 19 of this order shows that the AO, in the order passed u/s 143(3) has accepted an amount of ₹ 3,50,00,000/- received by the assessee from M/s Cindy Goods Supply Pvt. Ltd. towards share capital and share premium and no addition has been made. Similarly, in the case of M/s Pabla Leasing Finance Pvt. Ltd., the AO, in the order passed u/s 143(3) for A.Y. 2015-16, copy of which is placed at pages 503 and 504 of the paper book, has accepted an amount of ₹ 2,64,60,000/- towards preferential share capital and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be not interfered with. It is moreso when the assessee is a Charitable organization. We may also record the submission of the learned counsel for the respondent that insofar as unsecured loans are concerned, they were paid back in subsequent years, which shows that these were the genuine loans taken by the assessee. . 31. We, therefore, find force in the arguments of the ld. Counsel for the assessee that when the redeemable preferential shares have been redeemed to the investor companies in subsequent years which is much prior to the search, therefore, these investments are genuine. We further find from the various pages of the paper book that in response to the notice issued u/s 133(6) to the investor companies, the directors of the respective investor companies appeared before the AO whose statements were recorded u/s 131 and they have confirmed to have invested in the shares of the assessee company. Not a single question was put to any of the directors of these investor companies as to why they have invested crores of rupees in a non-listed company without any return. We, therefore, find merit in the argument of the ld. Counsel for the assessee that without discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the ld CITA against which assessee is in appeal before us, deserves to be allowed. We find that the assessee had furnished the following details before the ld AO :- a) Names and addresses of share subscribing companies. b) PAN of share subscribing companies c) ITR acknowledgements of share subscribing companies for Asst Year 2012- 13 d) Audited Balance Sheets for Asst Year 2012-13 e) Computation of total income for Asst Year 2012-13 f) Copy of relevant page of bank statements of share subscribing companies indicating the amount invested in assessee company together with the details of immediate source of credit thereon. g) Confirmation from share subscribing companies confirming the fact of making investment in shares of assessee company together with their respective sources of funds. h) Memorandum Articles of Association of assessee company i) Bank statements of assessee company evidencing the receipt of share capital and share premium from various shareholders by account payee cheques. 6.1. We find that notices issued u/s 133(6) of the Act were duly complied with by all the share subscribing companies. Summons issued u/s 131 of the Act to ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the creditworthiness of share applicants, these companies are having capital and reserves in several crores of rupees and the investment made in the assessee company is a small part of their capital as could be evident from the aforesaid table. These transactions are also duly reflected in the balance sheets of the share applicants. By this, the creditworthiness of share applicants is also proved beyond doubt. With regard to genuineness of transactions, the monies have been directly paid to the assessee company by account payee cheques out of sufficient bank balances available in their respective bank accounts. We find that the assessee had even proved the source of money deposited into the respective bank accounts of share applicants, which in turn had been used by them to subscribe to the assessee company as share application. Hence the source of source of source is also proved in the instant case though the same is not required to be done by the assessee as per law. The share applicants have confirmed the fact of investment in share capital and share premium in response to notice u/s 133(6) of the Act and have also confirmed the payments which are duly corroborated with thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made in the usual and ordinary course of business and that such book was in the custody of the bank, it was held admissible in evidence. Radheshyam v. Safiyabai Ibrahim AIR 1988 Bom. 361 : 1987 Mah. 725: 1987 Bank J 552. In view of the position of law as discussed above, it is always open for a borrower to contend, that even the creditworthiness of the lender stands proved to the extent of credits appearing in his Bank Account and he should be held to be successful in this contention. 6.5. We find that the Hon'ble Jurisdictional High Court in the case of S.K. Bothra Sons, HUF v. Income-tax Officer, Ward- 46(3), Kolkata reported in 347 ITR 347(Cal) wherein the Court held as follows: 15. It is now a settled law that while considering the question whether the alleged loan taken by the assessee was a genuine transaction, the initial onus is always upon the assessee and if no explanation is given or the explanation given by the appellant is not satisfactory, the Assessing Officer can disbelieve the alleged transaction of loan. But the law is equally settled that if the initial burden is discharged by the assessee by producing sufficient materials in support of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id verification process on the side of the department. It would be interesting to note in this regard that the Hon'ble Jurisdictional High Court in the case of CIT Kolkata III vs M/s Dataware Private Limited in ITAT No. 263 of 2011 dated 21.9.2011 had held as under:- In our opinion, in such circumstances, the Assessing officer of the assessee cannot take the burden of assessing the profit and loss account of the creditor when admittedly the creditor himself is an income tax assessee. After getting the PAN number and getting the information that the creditor is assessed under the Act, the Assessing officer should enquire from the Assessing Officer of the creditor as to the genuineness of the transaction and whether such transaction has been accepted by the Assessing officer of the creditor but instead of adopting such course, the Assessing officer himself could not enter into the return of the creditor and brand the same as unworthy of credence. So long it is not established that the return submitted by the creditor has been rejected by its Assessing Officer, the Assessing officer of the assessee is bound to accept the same as genuine when the identity of the creditor an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned counsel for the appellant and after going through the decision of the Supreme Court in the case of Cl. T. vs. M/s. Lovely Exports Pvt. Ltd. [supra], we are at one with the Tribunal below that the point involved in this appeal is covered by the said Supreme Court decision in favour of the assessee and thus, no substantial question of law is involved in this appeal. The appeal is devoid of any substance and is dismissed. 6.9. We also find that the Hon'ble Jurisdictional High Court in the case of CIT vs Leonard Commercial (P) Ltd in ITAT No. 114 of 2011 dated 13.6.2011 had held as under:- The only question raised in this appeal is whether the Commissioner of Income-tax (Appeals) and the Tribunal below erred in law in deleting the addition of ₹ 8,52,000/-, ₹ 91,50,000/- and ₹ 13,00,000/- made by the Assessing Officer on account of share capital, share application money and investment in HTCCL respectively. After hearing Md. Nizamuddin, learned Advocate appearing on behalf of the appellant and after going through the materials on record, we find that all such application money were received by the assessee by way of account payee cheques and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hlakshmi Vanijya (P) Ltd vs CIT reported in (2015) 60 taxmann.com 60 (Kolkata - Trib.) dated 30.7.2015. In response to this, the ld AR argued that there is no mandate in law that the assessee has to prove the source of source of share applicants. He argued that in the instant case, the assessee had duly discharged its complete onus by furnishing the requisite details. In case if the ld AO has got some doubts, he should have verified the same from the AO of those share applicants. We find from the plain reading of section 68 of the Act, the duty cast on the assessee is to explain the nature and source of credit found in his books. In the instant case, the credit is in the form of receipt of share application money from five share applicants. The nature of receipt towards share application money is well established from the entries passed in the respective balance sheets of the companies as investments. Hence the nature of receipt is proved by the assessee beyond doubt. In respect of source of credit, the assessee has to prove the three necessary ingredients i.e identity of share applicants, genuineness of transactions and creditworthiness of share applicants. In the instant case, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare applicants, creditworthiness of share applicants and genuineness of transactions beyond doubt. We find that the entire addition has been made by the ld AO based upon suspicion, surmises and conjectures and not upon proper evaluation and appraisal of the evidences and documents filed before him. We place reliance on the decision of the Hon'ble Apex Court in this regard in the case of Dhakeshwari Cotton Mills Ltd vs CIT reported in 26 ITR 775 (SC) wherein it has been held that no addition can be made without material and on mere suspicion. In these facts and circumstances, there is no need to treat the receipt of share application money from five share applicants as unexplained u/s 68 of the Act. Hence we do not find any infirmity in the order of the ld CITA in this regard. Accordingly, the grounds raised by the revenue are dismissed. 6.11. We find that the co-ordinate bench of this tribunal recently in the case of ITO vs Wiz-Tech Solutions Pvt Ltd in ITA No. 1162/Kol/2015 dated 14.6.2018 had held as under:- 28. From the details as aforesaid which emerges from the paper book filed before us as well as before the lower authorities, it is vivid that all the share app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the paper book that the appellant has even demonstrated the source of money deposited into their bank accounts which in turn has been used by them to subscribe to the assessee company as share application. Hence the source of source of source is proved by the assessee in the instant case though the same is not required to be done by the assessee as per law as it stood/ applicable in this assessment year. The share applicants have confirmed the share application in response to the notice u/s 133(6) of the Act and have also confirmed the payments which are duly corroborated with their respective bank statements and all the payments are by account payee cheques. 30. ***** 31. ***** 32. We would like to reproduce the Hon'ble High Court order in CIT vs. Gangeshwari Metal P.Ltd. in ITA no. 597/2012 judgement dated 21.1.2013, the Hon'ble High Court after considering the decisions in the case of Nova Promoters and Finlease Pvt. Ltd. 342 ITR 169 and judgement in the case of CIT vs. Lovely Exports 319 ITR (St) 5(SC) held as follows:- As can be seen from the above extract, two types of cases have been indicated. One in which the Assessing Officer carries out the exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more in line with facts of Lovely Exports (P) Ltd. (supra). There was a clear lack of inquiry on the part of the Assessing Officer once the assessee had furnished all the material which we have already referred to above. In such an eventuality no addition can be made under Section 68 of the Income Tax Act 1961. Consequently, the question is answered in the negative. The decision of the Tribunal is correct in law 33. The case on hand clearly falls in the category where there is lack of enquiry on the part of the A. O. as in the case of Ganjeshwari Metals (supra). b) In the case of Finlease Pvt Ltd. 342 ITR 169 (supra) in ITA 232/2012 judgement dt. 22.11.2012 at para 6 to 8/ it was held as follows. 6. This Court has considered the submissions of the parties. In this case the discussion by the Commissioner of Income Tax (Appeals) would reveal that the assessee has filed documents including certified copies issued by the ROC in relation to the share application affidavits of the directors, form 2 filed with the ROC by such applicants confirmations by the applicant for company's shares, certificates by auditors etc. Unfortunately, the Assessing Officer chose to base himse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropositions laid down in these case laws to the facts of this case, we are inclined to uphold the order of the Ld. Commissioner of Income Tax (Appeals) 35. To sum up section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source shall be assessed as its undisclosed income. In the facts of the present case, both the nature source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO's record. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to I.T.A. No.1494/Kol/2017 Assessment year 2012-13 M/s Baba Bhootnath Trade Comme rce Ltd . AO to disprove the materials placed before him. Without doing so, the addition made by the AO is based on conjectures and surmises cannot be justified. In the facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s rendered in the context of validity of revisionary jurisdiction u/s 263 of the Act by the Learned Administrative Commissioner. This fact has already been addressed by this tribunal in the case of VSP Steel P Ltd supra. No decision whatsoever was rendered by the Hon'ble Jurisdictional High Court in the case of Raj Mandir Estates P Ltd. on merits of the addition and hence does not come to the rescue of the revenue in the facts of the instant case. 6.15. We find that the ld DR had filed a written submission placing the facts and by placing reliance on various case laws. But we find that the ld DR had factually erred in stating that the share capital and share premium were received from the share subscribing companies in cash. The various documents as listed supra go to prove that the entire monies were received only through account payee cheques. For the sake of convenience, the written submissions of the ld DR on the factual aspects are reproduced below:- . 6.16. We find that majority of the factual observations made by the ld DR are only his general comments which is not emanating from the records of the ld AO or by the ld CITA. The vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up, section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source shall be assessed as its income of the previous year in which the same was received. In the facts of the present case, both the nature source of the share capital received with premium were fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed before the ld AO. Accordingly, all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction were placed before the ld AO and the onus shifted to the ld AO to disprove the materials placed before him. Without doing so, the addition made by the ld AO is based on conjectures and surmises cannot be justified. At the cost of repetition, the addition was confirmed by the ld CITA by making factually incorrect observations which are contrary to the facts recorded by the ld AO in the assessment order. In the facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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