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TMI Blog2019 (10) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... cumentary evidences on record. Nothing prevented the ld. AO to make enquiries from his side with the Assessing Officer of the lender company, and examine the veracity of the loan taken by the assessee, the details of which are very much available before the ld. AO. There is no case for the revenue to draw adverse inference on the various documentary evidences submitted by the assessee eventually to treat the loan received from M/s. Fastline Multitrade Pvt. Ltd., as ingenuine loan . Unexplained share capital and share premium - HELD THAT:- CIT(A) had elaborately dealt with the entire issue by due appreciation of the various documentary evidences submitted in respect of investor companies duly proving the three necessary ingredients of Section 68 of the Act viz. identity of the investors, creditworthiness of the investors and genuineness of the transactions. We find that none of these documentary evidences were controverted by the ld. AO by proceeding to make further enquiry in this regard. None of these facts were even denied by the ld. AO or any deficiencies were found thereon by the ld. AO and we also take note of the fact that out of the five investor companies who had inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same in the books of accounts. With these observations, he made addition u/s.68 of the Act in the sum of ₹ 25 lakhs. 3.1. Before the ld. CIT(A), the assessee stated that this loan of ₹ 25 lakhs was received from M/s. Fastline Multitrade Pvt. Ltd., by account payee cheques / RTGS. The assessee had paid interest on such loans after due deduction of tax at source thereon. Assessee had filed confirmation of loan during the course of assessment proceedings. The assessee had also filed income tax return acknowledgement for A.Y.2012-13 of the lender together with the financial statements and ITR acknowledgements for the A.Yrs 2013-14 and 2014-15 of the lender. The assessee also submitted that the copy of bank statement of the lender was also furnished before the ld. AO. Hence, it was pleaded that the assessee had proved the three necessary ingredients of the Section 68 of the Act viz. Identity of the creditor, genuineness of transactions and creditworthiness of the creditor. The ld. AO had not found any deficiencies in the said documents filed by the assessee and merely relied on the statements given by Shri Praveen Kumar Jain and his group of concerns during the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the entire copies of its bank statements as well as the bank statements of the lender company. All these documents go to prove that the loan received by the assessee from M/s. Fastline Multitrade Pvt. Ltd., is a genuine loan. The identity of the loan is not disputed by the ld. AO. The loan transactions given by the lender company to the assessee company by way of account payee cheque / RTGS is duly disclosed in the balance sheet of the lender company and hence, the genuineness of the transaction is also established. The financial statements of the lender company sufficiently go to prove that there is adequate creditworthiness for the lender to advance a sum of ₹ 25 lakhs to the assessee company. Hence, the ld. CIT(A) observed that the three necessary ingredients of Section 68 of the Act had been duly established beyond doubt by the assessee company. The ld. CIT(A) observed that in the instant case, the assessee had duly established the nature and source of credit in the form of unsecured loan. The ld. CIT(A) also observed that the assessee had filed the bank statement of the lender company wherein the source of source is also reflected thereon which is also proved in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cross examination, though specifically asked for in the course of assessment proceedings. In these facts and circumstances, there is no case for the revenue to draw adverse inference on the various documentary evidences submitted by the assessee eventually to treat the loan received from M/s. Fastline Multitrade Pvt. Ltd., as ingenuine loan . Accordingly, we do not find any infirmity in the order of the ld. CIT(A) granting relief to the assessee and the ground No.1 raised by the revenue is dismissed. 6. The last issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in deleting the addition made in the sum of ₹ 2,50,00,000/- towards unexplained share capital and share premium in the facts and circumstances of the case. 7. The brief facts of this issue are that the ld. AO observed that during the year the assessee company had issued one lakh shares of face value of ₹ 10/- each at a premium of ₹ 240/- per share totalling to ₹ 2,50,00,000/-. In other words, the assessee during the year received share capital and share premium from the following persons:- Sr No. Name of the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt filed with Registrar of Companies for having allotted the shares at premium, bank statements evidencing the investment made in the assessee company together with its source of funds. The ld. AO however, disregarded the entire evidences filed by the assessee without finding any deficiencies in these documentary evidences submitted before him. The ld. AO merely placed reliance on the investigation report of the Investigation Department carried out in the case of Shri Shirish C Shah. Accordingly, he treated the receipt of share capital and share premium in the sum of ₹ 2,50,00,000/- as unexplained cash credit u/s.68 of the Act and completed the assessment. 7.2. The assessee submitted the aforesaid various documentary evidences that were filed before the ld. AO and requested for consideration of the same by the ld. CIT(A). It was pleaded that the aforesaid documents would duly prove the three necessary ingredients of Section 68 viz. identity of the investors, creditworthiness of the investors and genuineness of the transactions. It was further pleaded that the assessee is no way connected with Shri Shirish C Shah and he had not referred to the name of the assessee per se in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational Highway, Vapi Gujarat PAN:AECS0861Q ING Vysya Bank Ltd. Dadar Branch Mumbai A/cNo.56101101389 RTGS/Vysah 1129170458 3 18.10.2011 50,00,000 No cash deposit in bank a/c before Issuing of cheq lie 4 Emporis Projects Ltd. 209, Sarthik-2 Opp. RajpathClub Ahmedabad- 380015 ING Vysya Bank Ltd. Dadar Branch Mumbai A/cNo.561011013622 RTGS/ Vvsah 11263701474 ₹ 3000000 RTGS/ Vysah 11270703287 ₹ 2000000 Total ₹ 500000 20.09.2011 27.09,2011 50,00,000 No cash deposit in bank a/c before Issuing of cheque 5 Shri Ganesh Spinners Ltd./ Vantra Natural Resources Ltd. G.T. Road, Karnal Side, Village Simla Molana, Panipat 132103 PAN: AACCS4221Q ING Vysya Bank Ltd. Nariman Point Branch Mumbai A/ cNo.50001 1038954 NEFT/Vysah 11318707156 14.11.2011 50,00,000 (B) SOURCE FOR SHARE CAPITAL SHARE PREMIUM S. No. Details of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 2937175438 which is much higher than the amount received 7.4. The ld. CIT(A) observed that the aforesaid documentary evidences together with the aforesaid tabulation goes to prove that the assessee had discharged the preliminary onus cost on it to prove the genuineness of the transaction by submitting the requisite details with documentary evidences and had discharged its onus of satisfying three necessary ingredients of Section 68 of the Act. The ld. CIT(A) specifically pointed out that the ld. AO had not brought any contrary evidence on record to disprove all these transactions. The ld. CIT(A) also observed that out of the five share holder companies, four companies are public limited companies whose shares are quoted in various stock exchanges. The ld. CIT(A) also placed reliance on the decision of Hon ble Jurisdictional High Court in the case of Vodafone India Services Pvt. Ltd., vs. Additional CIT reported in 368 ITR 1 (BOM) wherein it was held that the receipt of share capital and share premium was undoubtedly on capital account and there is no express provision in the Act to tax the same. The ld. CIT(A) also took note of the fact that CBDT vide its Inst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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