9911796707
TMI Blog2020 (12) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... olders as well as that of the assessee were filed before the AO which revealed that the share capital and premium have been subscribed by them through normal banking channel (NEFT or cheque) which goes on to show that the assessee has discharged the onus in respect of genuineness of the transaction. Based on the documents and materials called for by the AO who accepted the same after verification is an act of enquiry and the view taken by the AO in the light of the material / documents is a probable view - though these materials were available in the assessment folder, the ld. CIT(A) has neither found any infirmity about the documents furnished by assessee or the share applicants nor had any information or material in his possession to challenge the veracity of the documents referred to above - CIT(A) s omission to carry out any enquiry to show that the AO s enquiry was wrong, his opinion casting aspersions on the AO s action based on suspicious and conjectures cannot be accepted and so we reverse his actions of enhancement made and restore the assessment order. Thus in this case on hand, the assessee had discharged its onus to prove the identity, creditworthiness and genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ₹ 20.54 cr.) in a haste, without even enquiring the veracity of the voluminous documents and the statement recorded by AO which were available in the assessment folder. So, according to Ld. A.R the impugned action of Ld. CIT(A) is arbitrary, whimsical and against Rule of Law. According to Ld. AR, though the Ld. CIT(A) enjoys coterminous powers of AO, he while discharging his first appellate jurisdiction has to record his factual finding by disproving the finding/conclusion of Assessing Officer, if he has to differ from the view taken by the Assessing Officer. According to Ld. AR, the Ld. CIT(A) while adjudicating the appeal of the assessee against the addition of ₹ 84 lakhs as ordered by AO, had in fact sent the first three notices to the old address [even though change of address was intimated to AO Ld. CIT(A) by assessee vide letter dated 14/01/2015 which fact has been acknowledged by Ld CIT(A) at page 4, para 3.3 ] and the other three notices were sent in a span of twenty days, which was not served upon the assessee company for reasons beyond its control for which the assessee company has filed an affidavit of the director duly sworn in before the Notary expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the hands of the assessee is arbitrary and therefore, the same should be deleted. 4. Per contra, Shri Vijay Shankar, Learned CIT, DR vehemently opposing the plea of the Ld. AR contended that the Ld. CIT(A) had fixed the appeal of the assessee on six (6) occasions and the assessee did not bother to attend/appear before the Ld. CIT(A). According to the Ld. DR the reason that assessee did not receive any notice cannot be a ground to challenge the impugned order of the Ld. CIT(A), when the notices were issued at the address given by assessee. According to the Ld. DR, the Ld. CIT(A) has co-terminus power as that of the AO. And even though the documents have been collected by the AO for taking a favorable view of assessee in respect of share capital collected to the tune of ₹ 20.54 cr, however, the Ld. CIT(A) who enjoys a coterminous power as that of AO, can still differ from the view taken by the AO from the very same documents, which is found in the assessment folder. According to him, when an assessee has in its books, a sum of money credited, then the assessee is bound to satisfy the AO about the identity, genuineness and creditworthiness of the source of credit/money. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter had filed the relevant documents to substantiate the queries raised by the AO, which is placed at pages 17 to 55 of the P.B-I. The Ld. AR of the assessee drew our attention to section 131 notice dated 10/2/2015 to the director of assessee (supra), which is mentioned at pages 56-57 of the P.B-II and took us through the section 133(6) notice issued to all the thirty eight (38) shareholders/share applicants, which companies have subscribed to the shares of the assessee company which are found placed in PB-II. The Ld. AR of the assessee drew our attention to the copies of the respective responses/replies of the shareholders/share applicants which were directly given to the AO pursuant to his notice u/s. 133(6) of the Act which are found placed in PB-II. The Ld. AR drew our attention to the notice issued by the Assessing Officer u/s 142(1) of the Act wherein the AO during assessment proceedings asked for the nature and source of share capital raised by the assessee as well as of all the thirty eight (38) shareholders/share applicants. And the ld. A.R took our attention to the fact that they all responded directly to AO to the notices u/s 142(1) of the Act and filed all the docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l collected by the assessee company from thirty six (36) companies to the tune of ₹ 20.54 cr., without any enquiry is arbitrary exercise of power for which there is no sanction of law and so is untenable. According to him, the assessment is that of AY 2012-13 and the amendment of section 68 of the Act took place, wherein provision of bringing in the share premium was made by insertion of amendment in section 68 of the Act with effect from 01-04-2013 and is not applicable in this relevant AY. 6. Further on the point of taxation in respect of share premium it was pointed out by the Ld. AR that as per definition of income as provided under section 2(24) of the Act at the relevant point of time of (i.e. AY 2012-13) did not define as income, any consideration received for issue of shares in excess of its fair market value . According to him, this came into effect from 1-4-2013 and it would have no application to the share premium received by the assessee in the previous year relevant to AY 2012-13. Thereafter, he drew our attention to sub-clause (vii)(b) of sub-section (2) of section 56 of the Act, which was inserted by the Finance Act, 2012 w.e.f 1-4-2013, which is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been thoroughly enquired by the AO during the assessment proceedings. The Ld. AR drew our attention to the voluminous paper book (843 pages), and stated that all those documents were submitted before the AO by the assessee as well as by said thirty eight (38) share applicants. Therefore, according to the Ld. AR, the AO during the scrutiny assessment proceedings u/s. 143(3) after calling for information/explanation and after perusal of the documents placed before him has duly summoned Mr. Manish Kr. Dubey, the erstwhile director of the assessee company for the AY 2012-13 and after questioning him and thereafter recorded his statement in detail has taken a conscious view / decision has accepted ₹ 20.54 cr. out of total ₹ 21,38 crores assessee received as share capital. Thus, the share capital collected from thirty six (36) share companies was accepted by Assessing Officer and two companies was not accepted and so Assessing Officer added ₹ 84 lakhs. Again ld. A.R reminded us that even though the Ld. CIT(A) have co-terminus power while discharging his duties as first appellate authority, however he has neither bothered to discharge that coterminus power to make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of AO as well as Ld. CIT(A) and, therefore, assessee company cannot be faulted for non-service of notice. According to the Ld. AR when the assessment order was passed on 30-03-2015 itself, the assessee has changed its address from 6/3 Ola Bibi Tala Lane, Howrah-711104 , which was informed to the AO vide a letter dated 14-01-2015. However, the AO while passing the assessment order has wrongly reflected the old address on the body of the assessment order, whereas the assessee has changed its address to 21 Hemanta Basu Sarani, Fifth Floor, Room No. 506, Kolkata-700 001 (New address from 14/1/2015 referto page-7 of the P.B-1). However, according to the Ld. AR, at the new premises i.e. 21, Hemanta Basu Sarani, there arose a dispute between the landlord and the assessee. So, the landlord played mischief on the assessee and thereby kept the assessee in dark and did not co-operate with the assessee. Thus, the landlord ensured that no notice could be served upon the assessee from the office of ld. CIT(A) i.e. last two letters (i.e. 24.03.2017 and 24.03.2017) which were the enhancement notice. Because of this mischievous action of the landlord three (3) notices to the address at 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the assessment folder which contained the order-sheet maintained by Assessing Officer in assessee s case and the statutory notices issued by Assessing Officer and replies filed by the assessee and the thirty eight (38) share-applicants / shareholders as well as the recorded statement of assessee company s director on oath u/s 131 of the Act. We note that reply of assessee is found placed at 17-55 (PB-I) and the notices issued by AO replies of thirty eight share applicants, copies of which are found placed at PB-II (Page-1 -843) and from a perusal of these documents, we note that all of them have filed inter alia , their respective PAN Card, ITR acknowledgment, Certificate of Incorporation issued by ROC evidencing their identity, Bank Statements evidencing the genuineness of the money transactions and Audited Accounts for the year evidencing their high net-worth/creditworthiness to invest in the share capital of the assessee. Moreover, it is noted that PAN Card, Voter' s Id Card of the Directors of the respective share applicant companies are also found enclosed with their replies. ( We will discuss later in detail about each share applicant company infra ). And it is noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personal attendance of the Directors of the share applicant companies by exercising his plenary powers and issue summons u/s 131 of the Act to the Directors of the share applicant companies and examine them on oath. However, we note that no summons/notices were issued by the ld. CIT(A) to the share subscribers in the present case. It is settled that the first appellate authority has plenary powers in disposing of an appeal and the scope of his power is coterminus and co-extensive with that of the Assessing Officer. A perusal of section 131 of the Act reveals that it empowers the Commissioner (Appeals) to issue summons u/s 131 of the Act. Section 131 of the Act reads as follows: 131. (1) The Assessing Officer, Deputy Commissioner (Appeals), Joint Commissioner, Commissioner (Appeals ), Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner and the Dispute Resolution Panel referred to in clause (a) of sub-section (15) of section 144C shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the following matters, namely :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue has also been dismissed by the Hon'ble Apex Court. 12. Coming to another case wherein the main plank on which the AO made the addition u/s 68 of the Act was because the lenders/creditors [ like directors of share subscribing companies] did not turn up before him, in such a case that is Dy. CIT v. Rohini Builders [2002] 256 ITR 360 /[2003] 127 Taxman 523 the Hon'ble Gujarat High Court relying on the Hon'ble Apex Court ratio in the case of Orissa Corpn. (P) Ltd. 159 ITR 78, has held that onus of the assessee (in whose books of account credit appears) stands fully discharged if the identity of the creditor is established and actual receipt of money from such creditor is proved. In case, the Assessing Officer is dissatisfied about the source of cash deposited in the bank accounts of the creditors, the proper course would be to assess such credit in the hands of the creditor (after making due enquiries from such creditor). In arriving at this conclusion, the Hon'ble Court has further stressed the presence of word may in section 68. Relevant observations at pages 369 and 370 of this report are reproduced hereunder:- Merely because summons issued to some of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... While interpreting the meaning and scope of section 68, one has to bear in mind that normally, interpretation of a statute shall be general, in nature, subject only to such exceptions as may be logically permitted by the statute itself or by some other law connected therewith or relevant thereto. Keeping in view these fundamentals of interpretation of statutes, when we read carefully the provisions of section 68, we notice nothing in section 68 to show that the scope of the inquiry under section 68 by the Revenue Department shall remain confined to the transactions, which have taken place between the assessee and the creditor nor does the wording of section 68 indicate that section 68 does not authorize the Revenue Department to make inquiry into the source(s) of the credit and/or sub-creditor. The language employed by section 68 cannot be read to impose such limitations on the powers of the Assessing Officer. The logical conclusion, therefore, has to be, and we hold that an inquiry under section 68 need not necessarily be kept confined by the Assessing Officer within the transactions, which took place between the assessee and his creditor, but that the same may be extended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of the transactions between his creditor and sub-creditors nor is it the burden of the assessee to prove that the sub-creditor had the creditworthiness to advance the cash credit to the creditor from whom the cash credit has been. eventually, received by the assessee. It, therefore, further logically follows that the creditor's creditworthiness has to be Judged vis-a-vis the transactions, which have taken place between the assessee and the creditor, and it is not the business of the assessee to find out the source of money of his creditor or of the genuineness of the transactions, which took between the creditor and sub-creditor and/or creditworthiness of the sub- creditors, for, these aspects may not be within the special knowledge of the assessee. ********** ... If a creditor has, by any undisclosed source, a particular amount of money in the bank, there is no limitation under the law on the part of the assessee to obtain such amount of money or part thereof from the creditor, by way of cheque in the form of loan and in such a case, if the creditor fails to satisfy as to how he had actually received the said amount and happened to keep the same in the bank, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of cheques was not in dispute. Once the assessee had established that he had received the said amounts from the creditors aforementioned by way of cheques, the assessee must be taken to have proved that the creditor had the creditworthiness to advance the loans. Thereafter the burden had shifted to the Assessing Officer to prove the contrary. On mere failure on the part of the creditors to show that their subcreditors had creditworthiness to advance the said loan amounts to the assessee, such failure, as a corollary, could not have been and ought not to have been, under the law, treated as the income from the undisclosed sources of the assessee himself, when there was neither direct nor circumstantial evidence on record that the said loan amounts actually belonged to, or were owned by, the assessee. Viewed from this angle, we have no hesitation in holding that in the case at hand, the Assessing Officer had failed to show that the amounts, which had come to the hands of the creditors from the hands of the sub-creditors, had actually been received by the sub-creditors from the assessee. In the absence of any such evidence on record, the Assessing Officer could not have tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l burden and those materials disclosed by the assessee prompted the Assessing Officer to enquire through the Inspector to verify the statements. 16. In a case where the issue was whether the assessee availed cash credit as against future sale of product, the AO issued summons to the creditors who did not turn up before him, so AO disbelieved the existence of creditors and saddled the addition, which was overturned by Ld. CIT(A). However, the Tribunal reversed the decision of the Ld. CIT(A) and upheld the AO s decision, which action of Tribunal was challenged by the Hon'ble High Court, Calcutta in the case of Crystal Networks (P.) Ltd. v. Commissioner of Income-tax 353 ITR 171 wherein the Tribunal s decision was overturned and decision of Ld. CIT(A) upheld and the Hon ble High Court has held that when the basic evidences are on record the mere failure of the creditor to appear cannot be basis to make addition. The court held as follows: 8. Assailing the said judgment of the learned Tribunal learned counsel for the appellant submits that Income-tax Officer did not consider the material evidence showing the creditworthiness and also other documents, viz., confirmatory sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax (Appeals) on facts having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this -fact finding. Indeed the Tribunal did not really touch the aforesaid fact finding of the Commissioner of Income-tax (Appeals) as rightly pointed out by the learned counsel. The Supreme Court has already stated as to what should be the duty of the learned Tribunal to decide in this situation. In the said judgment noted by us at page 464, the Supreme Court has observed as follows: The Income-tax Appellate Tribunal performs a judicial function under the Indian Income-tax Act; it is invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its finding on all the contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law. 11. The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its finding on all contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law. It is also ruled i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor and the genuineness of transaction through account payee cheque has been established. We find that both the Commissioner of Income Tax (Appeal) and the Tribunal below followed the well-accepted principle which are required to be followed in considering the effect of Section 68 of the Act and we thus find no reason to interfere with the concurrent findings of fact recorded by both the authorities. 18. Our attention was also drawn to the decision of the Hon'ble Supreme Court while dismissing SLP in the case of Lovely Exports as has been reported as judgment delivered by the CTR at 216 CTR 295: Can the amount of share money be regarded as undisclosed income under section 68 of the Income tax Act, 1961? We find no merit in this special leave petition for the simple reason that if the share application money is received by the assessee- company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgment. 19. Our attention was also drawn to the decision of the Hon'ble Calcutta High Court while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble High Court, Calcutta in the case of Commissioner Of Income Tax vs M/s. Nishan Indo Commerce Ltd dated 2 December, 2013 in INCOME TAX APPEAL NO.52 OF 2001 wherein the Court held as follows: The Assessing Officer was of the view that the increase in share capital by ₹ 52,03,500/- was nothing but the introduction of the assessee's own undisclosed funds/income into the books of accounts of the assessee company. The Assessing Officer accordingly treated the investment as unexplained credit under Section 68 of the Income Tax Act and added the same to the income of the assessee. Being aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) being the First Appellate Authority and contended that the Assessing Officer had no material to show that the share capital was the income of the assessee company and as such the addition made by the Assessing Officer under Section 68 of the Act was wrong. The learned Commissioner of Income Tax (Appeals) after hearing the department and the Assessee Company deleted the addition of ₹ 52, 03,500/- to the income of the assessee company during the Assessment Year in question. The learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt held that when Section 68 is resorted to, it is incumbent on the assessee company to prove and establish the identity of the subscribers, their credit worthiness and the genuineness of the transaction. The aforesaid judgment was rendered in the context of the factual background of the aforesaid case where, despite several opportunities being given to the assessee, nothing was disclosed about the identity of the shareholders. In the instant case, the assessee disclosed the identity and address and particulars of share allocation of the shareholders. It was also found on the facts that all the shareholders were in existence. Only nine shareholders subscribing to about 900 shares out of 6, 12,000 shares were not found available at their addresses, and that too, in course of assessment proceedings in the year 1994, i.e., almost 3 years after the allotment. By an order dated 2nd May, 2001, this Court admitted the appeal on three questions which essentially centre around the question of whether the Appellate Commissioner erred in law in deleting the addition of ₹ 52, 03, 500/- to the income of the assessee as made by the Assessing Officer. We are of the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has not adopted either of the aforesaid courses but has simply blamed the assessee for not producing those share applicants. In our view, in the case before us so long the Assessing Officer was unable to arrive at a finding that the particulars given by the assessee were false, there was no scope of adding those money under section 68 of the Income- tax Act and the Tribunal below rightly held that the onus was validly discharged. We, thus, find that both the authorities below, on consideration of the materials on record, rightly applied the correct law which are required to be applied in the facts of the present case and, thus, we do not find any reason to interfere with the concurrent findings of fact based on materials on record. The appeal is, thus, devoid of any substance and is dismissed summarily as it does not involve any substantial question of law. 22. Coming to the merit of the action of Assessing Officer to accept thirty six (36) share applicants identity, creditworthiness and genuineness, we note that pursuant to the notices/queries of AO during the assessment proceedings, the assessee / appellant company had filed written explanation with e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve independently called for details by issuing notice u/s 133(6) of the Act which unfortunately the ld. CIT(A) has not bothered to do and after having gone through the documents collected by the AO in the assessment folder which contained all the documents referred in paper book II (pages 843) has doubted the genuineness of the share capital raised by the assessee company and has enhanced the addition which according to the ld. A.R is arbitrary and whimsical. We find force in the arguments of the ld. A.R that even if the assessee did not appear for whatever reason it had given in the Affidavit for not receiving the notice, the ld. CIT(A) had enough power to independently examine the impugned assessment order placed before him. According to us, if he [Ld. CIT(A)] had any doubt / suspicion in respect of any share applicant or the fund received by the assessee in its books, the ld. CIT(A) ought to have exercised his co-terminus powers by issuing summons / notices and should have discovered the truth. We note that other than expressing his dissatisfaction about the way the enquiry has been conducted by the AO, the ld. CIT(A) has not neither brought out any action/omission on the part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. ₹ 54 lakhs and M/s. Harmony Vanijya Pvt. Ltd. ₹ 30 lakhs and thus made the addition of ₹ 84 lakhs against the assessee u/s 68 of the Act. 24. We note that it is not the case of the Ld. CIT(A) that on scrutiny of bank statement of share applicants he came to know that there was cash deposit in the investor companies just before they transferred the share capital and premium to assessee company. And it is not the case of the Ld. CIT(A) that the identity, creditworthiness and genuineness of the transaction found to have been accepted by the AO during the assessment proceedings is based on wrong appreciation of evidence or based on bogus/forged documents. We have examined all the evidences furnished to the AO during the assessment proceedings and which were kept in the assessment folder of AO, which the Ld. CIT(A) has acknowledged to have gone through while adjudicating the appeal before him in respect of thirty eight(38) companies. All the investor companies admitted to AO that they have made investment in the share capital of the investor companies by filing confirmation letters. From the documents produced / books of account the transaction of investment in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AABCF8814F Yes 14. Gyanika Merchants Pvt Ltd AACCG5504G Yes 15. Harmony VanijyaPvt Ltd AACCH6951G Yes 16. HippolyteTradecomPvt Ltd AACCH7122H Yes 17. Jaganmata Sales Pvt Ltd AACCJ5212E Yes 18. Jagriti Commodities Pvt Ltd AABCJ7810P Yes 19. Jai MatadiCommosalesPvt Ltd AACCJ5211H Yes 20. Joyful Tie up Pvt Ltd AACCJ7267K Yes 21. Jubilee VincomPvt Ltd AACCJ6266E Yes 22. Lighthouse Merchants Pvt Ltd AACCL1461F Yes 23. Magnetic Barter Pvt Ltd AAHCM5948D Yes 24. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Relevant page No. showing capital (PB-2) Sum invested in assessee company (Rs.) 1 Aditi Vintrade P.Ltd 8 10 21,90,00,232 17 67,00,000 2. Advance Shoppers Pvt Ltd. 33 34 20,56,00,233 40 50,00,000 3. Akshara Commosales Pvt. Ltd. 52 48 22,70,00,383 60 50,00,000 4. Alexa Finvest Consultant Pvt. Ltd. 75 74 18,66,00.351 82 48,00,000 5. Alexa VintradePvt Ltd 21,78,02,424 101 1,45,00,000 6. Anjali Suppliers Pvt Ltd 114-115 118 27,63,00,585 126 90,00,000 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 448 60,00,000 21. Jubilee VincomPvt Ltd 461-462 455 26,37,55,943 470 1,15,00,000 22. Lighthouse Merchants Pvt. Ltd. 483 486 20,72,00,225 493 1,18,00,000 23. Magnetic Barter Pvt Ltd 507 509 15,30,00,250 516 45,00,000 24. Matarani Consultancy Pvt Ltd. 530 529 17,88,00,265 537 20,00,000 25 Mindpower Exports Pvt. Ltd. 546 549 17,94,00,266 559 40,00,000 26. NishakarTracomPvt Ltd. 569-570 571 10,80,04,799 580 83,00,000 27. OmeshwarTracom Ltd. ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal of the assessee company. Moreover, the share subscribers have also filed before the Assessing Officer the source from which they subscribed to shares of assessee except M/s Alexa Vintrade Pvt. Ltd. (though not required as per law in force for AY 2012-13). All of the share subscribers have filed their responses, bank statement, audited balance sheet, certificate of ITR etc. Thus, the assessee had discharged the onus on it about the creditworthiness of the shareholders. It is also noted that the source of the investments has been clearly brought to the notice of the Assessing Officer during assessment proceedings. Further, the bank statements of all the shareholders as well as that of the assessee were filed before the Assessing Officer, which revealed that the share capital and premium have been subscribed by them through normal banking channel (NEFT or cheque) which goes on to show that the assessee has discharged the onus in respect of genuineness of the transaction. Based on the documents and materials called for by the Assessing Officer who accepted the same after verification is an act of enquiry and the view taken by the Assessing Officer in the light of the material / doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from the source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there was no cash deposit in its Bank A/c before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. II. M/s Advance Shoppers Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 24-4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of this share applicant are placed at page 48-67 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAJCA 1782 F and its Networth as on 31.03.2012 (in total)- Share Capital Reserves is to the tune of ₹ 22,70,00,383/- (PB-2 page 60) and the investment made in the assessee-company including the share premium comes to ₹ 50,00,000/-. The payment has been made by this entity to assessee through banking channels and deposited an amount of ₹ 50,00,000/- on 14.01.2012 through cheque (PB-2 Page-52). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 48-67) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de in the assessee-company including the share premium comes to ₹ 50,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of ₹ 50,00,000/- on 14.01.2012 through cheque (PB-2, Page 114-115). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 48-67)and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. VII. M/s Circular Vintrade Pvt. Ltd. : On perusal of the paper book-2, it reveals that the document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 187-206 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAECC 4897 Q and its Networth as on 31.03.2012 (in total)- Share Capital Reserves is to the tune of ₹ 19,77,00,277/- (PB-2 page 201) and the investment made in the assessee-company including the share premium comes to Rs..37,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited a n amount of ₹ 37,00,000/- on 22.12.2011 through cheque (PB-2, Page 194) . This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 187-206) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hannels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XII. M/s Festino Dealtrade Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 258-279 of share applicant which is a Private Limited Company, and which has Permanent Account No. AABCF 5278 R and its Networth as on 31.03.2012 (in total)- Share Capital Reserves is to the tune of ₹ 9,76,07,952/- (PB-2 page 273) and the investment made in the assessee-company including the share premium comes to ₹ 6,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs..6,00,000/- on 25.01.2012 through cheque (PB-2, Page 262). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 280-301) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XV. M/s Harmony Vanijya Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 302-323 of share applicant which is a Private Limited Company, and which has Permanent Account No. AACCH 6951 G and its Networth as on 31.03.2012 (in total)- Share Capital Reserves is to the tune of ₹ 23,43,01,174/- (PB-2 page 316) and the investment made in the assessee-company including the share premium comes to ₹ 30,00,000/-. The payment has been made by this entity to assessee through banking channels and had d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t made in the assessee-company including the share premium comes to Rs..35,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of ₹ 35,00,000/- on 23.12.2011 through cheque (PB-2, Page 352). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 368-388) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XVIII. M/s Jagriti Commodities Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 389-408 of share applicant which is a Private Limited Company, and which has Permanent Account No. AABCJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt which is a Private Limited Company, and which has Permanent Account No. AACCJ 5211 H and its Networth as on 31.03.2012 (in total)- Share Capital Reserves is to the tune of ₹ 19,10,00,256/- (PB-2 page 425) and the investment made in the assessee-company including the share premium comes to ₹ 40,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of ₹ 40,00,000/- on 09.02.2012 through cheque (PB-2, Page 415). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 409-431) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXI. M/s Jubilee Vincom Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXII. M/s Lighthouse Merchants Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 478-499 of share applicant which is a Private Limited Company, and which has Permanent Account No. AACCL 1461 F and its Networth as on 31.03.2012 (in total)- Share Capital Reserves is to the tune of ₹ 20,72,00,225/- (PB-2 page 493) and the investment made in the assessee-company including the share premium comes to ₹ 1,18,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of ₹ 58,00,000/- on 20.01.2012 through cheque and deposited an amount of ₹ 60,00,000/- on 21.01.2012 through cheque (PB-2, Page 483). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 478-499) and thus it is noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds as well as financial statements (PB-2, page 500-522) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXV. M/s Mindpower Exports Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 544-564 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAHCM 5756 D and its Networth as on 31.03.2012 (in total)- Share Capital Reserves is to the tune of ₹ 17,94,00,266/- (PB-2 page 559) and the investment made in the assessee-company including the share premium comes to ₹ 40,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of ₹ 40,00,000/- on 05.01.2012. through cheque (PB-2, Page 546). This share applicant company has filed ID Proof of its Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sited an amount of ₹ 38,00,000/- on 07.12.2011 through cheque (PB-2, Page 569-570). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page .565-582) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO not to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant was erroneous/perverse and we find that this share subscriber has discharged its burden to prove its identity, creditworthiness and genuinety of the share transaction which we draw on the strength of the documents referred to supra and so we accept the claim of assessee in-respect of ₹ 54,00,000/- XXVIII. M/s ParamatmaVinimay Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 606-629 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAFCP 1334 G and its Networth as on 31.03.2012 (in total)-Share Capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share applicant which is a Private Limited Company, and which has Permanent Account No. AAGCP 3907 L and its Networth as on 31.03.2012 (in total)-Share Capital Reserves is to the tune of ₹ 8,23,00,470/- (PB-2 page 642) and the investment made in the assessee-company including the share premium comes to ₹ 4,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of ₹ 4,00,000/- on 23.02.2012 through cheque (PB-2, Page 634). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 630-647) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXXI. M/s Samv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXXII. M/s Saraswar Projects Advisory Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 689-711 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAQCS 1529 M and its Networth as on 31.03.2012 (in total)- Share Capital Reserves is to the tune of ₹ 17,33,00,366/- (PB-2 page 705) and the investment made in the assessee-company including the share premium comes to ₹ 85,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of ₹ 30,00,000/- on 09.12.2011 through cheque and had deposited an amount of ₹ 55,00,000/- on 24.01.2012 through cheque (PB-2, Page 696-697). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 689-711 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation of source of the funds as well as financial statements (PB-2, page 712-733) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXXV. M/s Sincere Vintrade Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 756-778 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAQCS 0605 L and its Networth as on 31.03.2012 (in total)- Share Capital Reserves is to the tune of ₹ 23,93,01,631/- (PB-2 page 772) and the investment made in the assessee-company including the share premium comes to ₹ 1,50,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of ₹ 25,00,000/- on 20.12.2011 through cheque and had deposited an amount of ₹ 40,00,000/- on 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough banking channels and had deposited an amount of ₹ 45,00,000/- on 31.12.2011 through cheque (PB-2, Page 787). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 779-800) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXXVIII. M/s Violet Advisory Pvt. Ltd.: On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 823-843 of share applicant which is a Private Limited Company, and which has Permanent Account No. AADCG 7386 C and its Networth as on 31.03.2012 (in total)- Share Capital Reserves is to the tune of ₹ 16,24,00,233/- (PB-2 page 837) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application money was made by account payee cheques, (v) the details of the bank accounts belonging to the share applicants and their bank statements, (vi) in none of the transactions the there is deposit of cash before issuing cheques to the assessee company, (vii) the applicants are having substantial creditworthiness which is represented by a capital and reserve as noted above. 27. As noted from the judicial precedents cited above, where any sum is found credited in the books of an assessee then there is a duty casted upon the assessee 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 capital with premium from share applicants. The nature of receipt towards share capital is seen from the entries passed in the respective balance sheets of the companies as share capital and investments. 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. For proving the identity of share applicants, the assessee furnished the name, address, PAN of share applicants togeth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lishing their identity, creditworthiness and genuineness of transaction proved beyond doubt and had duly discharged its onus in full. Nothing prevented the Learned AO to make enquiries from the assessing officers of the concerned share applicants for which every details were very much made available to him by the assessee. We find that the reliance placed by the Learned Ld. CIT(1) on the decision of the Hon'ble Apex Court in the case of CIT vs Lovely Exports (P) Ud reported in (2008) 216 CTR 195 (SC) is very well founded, wherein, it has been very clearly held that the only obligation of the company receiving the share application money is to prove the existence of the shareholders and for which the assessee had discharged the onus of proving their existence and also the source of share application money received. 3.4. 1. We also find that the impugned issue is also covered by the decision of Hon'ble Calcutta High Court in the case of CIT vs Roseberry Mercantile (P) Ltd in GA No. 3296 of 2010 ITAT No. 241 of 2010 dated 10.1.2011, wherein the- questions raised before their lordships and decision rendered thereon is as under:- On the facts and in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O concluded that these shareholders do not have creditworthiness to invest in the assessee company and brought the entire sum of ₹ 57,00,000/- to tax as unexplained cash credit u/s 68 of the Act. 4.2. On first appeal, the Learned CIT(A) observed that entire share application monies of ₹ 57,00,000/- we received during the previous year 2004-05 relevant to Asst Year 2005-06 from 20 persons and the shares were allotted to them during the asst year under appeal. He observed that the assessee had furnished details of the share applicants giving the date wise receipts, mode of payment, amount, name, address, income tax returns, PA No. of share applicants along with their balance sheet. The Learned CITA also observed that the assessee in its reply to show cause notice before the Learned AO had requested him to use his power and authority for the physical appearance of the shareholders which was not exercised by the Learned AO. Instead the Learned AO continued to insist on the assessee to produce the shareholders before him. He ultimately concluded that the assessee had duly discharged its onus of providing complete details of the shareholders and in any case, no addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. However, we find from the file that the assessee had filed a detailed paper book and written submissions. Hence the case is disposed off based on the arguments of the Learned DR and written submissions and paper book already available on record. The facts stated in the Learned CIT(A) were not controverted by the Learned DR before us. We find that the assessee had given the complete details about the share applicants clearly establishing their identity, creditworthiness and genuineness of transaction proved beyond doubt and had duly discharged its onus in full. Nothing prevented the Learned AO to make enquiries from the assessing officers of the concerned share applicants for which every details were very much made available to him by the assessee. We find that the reliance placed by the Learned CITA on the decision of the Hon'ble Apex Court in the case of CIT vs Lovelv Exports (p) Ltd reported in (2008) 216 CTR 195 (SC) is very well founded, wherein, it has been very clearly held that the only obligation of the company receiving the share application money is to prove the existence of the shareholders and for which the assessee had discharged the onus of proving their exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as the undisclosed income of the assessee. No substantial question of law arose. 6.3. We find that the argument of the Learned DR to set aside this issue to the file of the Learned AO for verification of share subscribers would not serve any purpose as the ratio decided in the above cases is that in any case, no addition could be made in the hands of the recipient assessee. In view of the aforesaid findings and respectfully following the decision of the apex court (supra), Jurisdictional High Court (supra) and Delhi High Court (supra) , we find no infirmity in the order of the Learned CIT(A) and accordingly, the grounds raised by the Revenue are dismissed. (c) The ITAT Kolkata in ITA No.1061/Ko1/2012 in the case of ITO Wd.3(2) Kol, vs. M/s. Steel Emporium Ltd dated 05-02-2016. In this the decision the Ld. Tribunal held as follows: 10. We have heard both the rival parties and perused the materials available on record. The Ld. DR vehemently supported the order of the AO. Before us the Ld. AR submitted that the assessee raised share application money during the year from 25 applicants. The AO was furnished with the copy of Form 2 of Allotment of Shares to the Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment. a) Copy of share applications from the share applicants (copies enclosed) b) Copy of Form 2 filed with Registrar of Companies, West Bengal (copy enclosed) c) Copy of Form 18 about the Registered Office of the applicants for change of address subsequent to the date of allotment, i.e. 31.03.2009 (copies enclosed) d) Members register e) Share application Allotment Register f) Copy of board resolution. g) Replies from Share applicants to the notice u/s. 133(6) issued to them by the AO seeking information and documents about the sources and to examine their identity, genuineness of the transaction and their creditworthiness. (copy enclosed). h) Copy of audited accounts. i) Copy of bank statements. j) Copy of Income tax acknowledgment of return filed for AY 2009- k) Copy of PAN Card. l) Details of sources of funds. m) Copy of covering letter for delivery of shares. n) Copy of master data as per ministry of Company Affairs records. o) Copy of Annual return. p) Copy of Memorandum and articles of Association. Finally the Ld. AR relied on the order of the Ld. CIT(A 10. 1 From the aforesaid discussio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... co Commodities Pvt. Ltd. and M/s. Shree Shyam Trexim Pvt. Ltd. for A. Y.2005-06 and AY.2004-05 respectively were completed by the I TO, Ward 9(4), Kolkata. Under the circumstances, I am of the opinion that the AO was not justified in holding that the share applicant companies were not in existence. The assessment orders were completed on the address as provided by the appellant company in the course of assessment proceedings. It is not known as to how the AO's inspector had reported that the aforesaid companies were not in existence at the given address. Since the appellant company had provided sufficient documentary evidences in support of its claim of receipt of share application money, I am of the opinion that the no addition u/s.68 could be made in the hands of appellant company. On going through the various judicial pronouncements relied upon by the appellant, it is observed that the view taken as above is also supported by them. In view of above the AO is directed to delete the addition of ₹ 54,00,000/ -. The ground Nos. 2 and 3 are allowed, 7. Aggrieved by the order of CIT{A) the Revenue is in appeal before the Tribunal. 8. We have heard the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, addresses of the share applicants, confirmatory letters from them, copies of bank statements of both the company as well as the share applicants and copies of share application forms. In spite of the aforesaid documentary evidences the AO held the explanation to be unacceptable and treated the share application as unexplained cash credit thereby making addition under Section 68 of the Income-tax Act, 1961. On appeal the CIT(Appeals) deleted the aforesaid addition holding that the identity of the share applicants stood established beyond doubt, all the payments were through account payee cheques and the share applicants were regular income-tax assessee s. The CIT(Appeals) further held that the Revenue did not bring any evidence on record to suggest that the share application had been received by the assessee from its own undisclosed sources nor any material was brought on record to show that .the applicants were bogus. The Revenue was neither able to controvert the documentary evidences filed by the appellant nor prove that the share application were ingenuine or the applicants were non-creditworthy. The findings of the CIT(Appeals) were upheld by the Income-tax Appellate Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession and then comes forward to merely reject the same on the presumptions. The present case falls in the latter category. Here the Assessing Officer after noting the facts, merely rejected the same. This would be apparent from the observations of the Assessing Officer in the assessment order to the following effect:- ''Investigation made by the Investigation Wing of the department clearly showed that this was nothing but a sham transaction of accommodation entry. The assessee was asked to explain as to why the said amount of ₹ 1,11,50,000/- may not be added to its income. In response, the assessee has submitted that there is no such credit in the books of the assessee. Rather, the assessee company has received the share application money for allotment of its share. It was stated that the actual amount received was ₹ 55,50,000/- and not ₹ 1,11,50,000/- as mentioned in the notice. The assessee has furnished details of such receipts and the contention of the assessee in respect of the amount is found correct. As such the unexplained amount is to be taken at ₹ 55,50,000/-. The assessee has further tries to explain the source of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer ought to have done was to enquire into the matter by, if necessary, invoking his powers under Section 131 summoning the share applicants or directors. No effort was made in that regard. In the absence of any such finding that the material disclosed was untrustworthy or lacked credibility the Assessing Officer merely concluded on the basis of enquiry report, which collected certain facts and the statements of Mr.Mahesh Garg that the income sought to be added fell within the description ofS.68 of the Income Tax Act 1961. Having regard to the entirety of facts and circumstances, the Court is satisfied that the finding of the Tribunal in this case accords with the ratio of the decision of the Supreme Court in Lovely Exports (supra). The decision in this case is based on the peculiar facts which attract the ratio of Lovely Exports (supra). Where the assessee adduces evidence in support of the share application monies, it is open to the Assessing Officer to examine it and reject it on tenable grounds. In case he wishes to rely on the report of the investigation authorities, some meaningful enquiry ought to be conducted by him to establish a link between the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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