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TMI Blog2021 (1) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with law. The Revenue cannot agitate that the CIT(A) should not have admitted the additional evidence. Addition u/s 68 - We find that the Ld. AR has substantiated his arguments with the judicial decisions and the material facts with the evidences which cannot be disputed and the Ld. CIT(A) has also considered the legal aspects and the remand report and took a reasonable decision. We also find that in respect of third ground raised by the revenue, that the CIT(A) has not considered the findings of the A.O. in the remand report in respect of two investors who have nothing to do with the investment but only accommodating operations. Whereas, the Ld CIT(A) having received the remand report has dealt at para 6.4.1 of the order, where these companies have been tested and investigated by the DDIT, (Inv) Ahmedabad and the documentary evidence was filed. CIT(A) accepts that these companies actually exist and have capacity to make investments in assessee company as it was proved in the case of the investigation at Ahmedabad and Baroda. The CIT(A) also observed that the assessee has discharged his onus of burden of proof in respect of identity of investor, creditworthiness and ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utiny and notice u/s. 143(2) and 142(1) of the Act were issued. In response to the notices, the Ld. AR of the assessee appeared from time to time and submitted details and the case was discussed. The A.O. on the perusal of the financial statements found that the assessee company has issued 2,58,750 non-cumulative convertible preference shares of face value of ₹ 100/- each at premium. The preference share capital including the share premium raised during the financial year is ₹ 31,05,00,000/-.The A.O. has called for the information of 11 investors who have invested in the assessee company referred at page 3 of the assessment order as under: 2. Notice U/s. 142(1) of the Act was issued to the assessee company on 02.11.2012, calling for the following details with regard to the above share capital raised by it during the year: a. Name, address, amount and PAN of the shareholders/share subscribers. b. Copy of Bank book highlighting the relevant entries. c. Income tax return with annexure thereto, Profit loss account and balance sheet with schedules thereto and capital account of the shareholders/share subscribers. d. Name of the Bank and branch, amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. dealt on the information submitted by the assessee and wants to verify the identity of shareholders. The A.O. observed that the creditworthiness and genuineness of the transaction were not proved. The A.O. also observed that inspite of providing ample opportunities the assessee has failed to prove the identity of the shareholders. In the course of the assessment proceedings the assessee filed a letter dated 09.01.2013 with the details of investors with copies of share application forms, balances sheet, bank statement entries of the shareholders. The A.O. was not satisfied with the information submitted by the assessee company as per the books of accounts and neither the shareholders came forward and produced the books of accounts nor any statement to support their investments in the assessee company was furnished. Further, the report of the inspector also proved that the investors are not available at the addresses provided. The A.O. considering the fact of non availability of the investors, relying on the judicial decisions came to conclusion that the assessee has failed to prove the identity of shareholders. In respect of second ingredient of creditworthiness of the shareh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 2 to 8, para 5 of the order which is as under:- 5. During the course of appellate proceedings, a written submission was filed, the relevant part of which is summarized as under: Disallowance u/S. 68 of the Act amounting to ₹ 31,05,00,000/- On the facts and circumstances of the case and in law the LAO erred in making addition u/s. 68 of the Act, ₹ 31,05,00,000/- received as preference share capital including share premium front parties. Appellant pleads that it had discharged its onus of proving the identity of the preference shareholders and the addition made is unfair, illegal and excessive. Facts 2.01. The appellant company introduced share capital of ₹ 2,58,75,000/- by way of Issued, Subscribed Paid-up Share Capital for 2,58,750 non-cumulative convertible preference shares. 2.02. Details of non-cumulative preference share are as disclosed at page No. 3 of this order. 2.03. The appellant company submitted the following details vide letter dated 09.01.2013 and 23.01.2013. a. Copy of correspondence with preference shareholders alongwith share certificate. b. Copy of application forms c. Copy of board resoluti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant company. 2.09 The appellant company has submitted various documents as stated above. The appellant company is also submitting before Your Honour copy of acknowledgement of return of income, confirmation for making payment to the appellant company and copy of PAN card. 2.10 The above shareholders are company and regularly assessed to Income Tax. Their PAN is submitted before Your Honour. This reveals the identity of the shareholder. 2.11 The Ld. AO vide letter dt 10.01.2013 brought to the appellant's notice that its reply dated 08.01.2013 09.01.2013 was general in nature and did not contain any information/evidence specifically with regard to the identity creditworthiness of the shareholder and genuineness of the transaction. However, the details submitted by appellant company vide letter dt. 09.01.2013 contained i. Copy of correspondence with shareholder, ii. Share application form, iii. Copy of board resolution passed by shareholder for making investment in the shares of appellant company, iv Bank statements of the shareholders and v. Confirmations from shareholders. 2.12 Merely not producing shareholders before the Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has relied on the statement recorded u/s. 131 on oath of Shri Jagdish Kumar Gupta, Director of J. Kumar Infraprojects Limited in which he has stated that that the said company has received bogus funds in the form of share application money pending allotment as on 31.03.2006 from a few companies whose credit worthiness is doubtful. In the said list, name of Alken Management and Financial Services Private Limited is also appearing. 2.19 We have to state that merely because the said company i.e. Alken Management and Financial Services Private Limited was providing bogus funds to M/s. J Kumar Infra projects Ltd., it does not prove that the said company has made bogus investment in the appellant company also. No such confession is available for 2.20 The Ld. AO had issued notice u/s. 133(6) of the Act to the banks of two companies i.e. Hormony Energy Private Limited and Epson Trading Private Limited. As per the Ld. AO, KYC forms do not reveal any particulars or specifies as may establish the identity of the person behind the shareholder company. As can be seen from the above KYC forms, they are duly signed by the director of the company and also name of the authorised direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions, etc. of the shareholders. iii. Priority Traders Private Limited (Known as Choice exterior and Interio Pvt. Limited - ₹ 2,50,80,000/- The financial statement of the above company reveals the following: Equity share capital of ₹ 1,45,00,000/- with high reserves and surplus of ₹ 8,68,60,289/- The company has huge cash and bank balances of-₹ 43,51,534/- The company has huge investments of ₹ 12,43,10,000/- Fixed assets stand at ₹ 13,03,148/- The above details prove the credibility of the company. Therefore, the appellant has proved identity, creditworthiness and genuineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. iv. Shri Ganesh Spinners Ltd. - 3,50,40,000/- The financial statement of the above company reveals the following: Equity share capital of ₹ 45,06,53,000/- with high reserves and surplus of ₹ 1,00,00,00,000/- Fixed Assets of ₹ 69,59,372/-. The company has huge cash and bank balances of ₹ 1,58,19,748/- The company has huge investments of ₹ 1,32,04,52,150/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company reveals the following: Equity share capital of ₹ 1,30,50,000/- with high reserves and surplus of ₹ 4,71,67,413/- The company has investment of ₹ 7,90,40,000/- The above details prove the credibility of the company. Therefore, the appellant has proved identity, creditworthiness and genuineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. ix. Harekrislma Securities Private Limited-₹ 5,00,40,000/- The financial statement of the above company reveals the following: Equity share capital of ₹ 96,44,000/- with high reserves and surplus of ₹ 11,66,26,828/- The Company has cash bank balance of ₹ 35,22,934/- The company has huge investment of ₹ 10,01,19,700/- The above details prove the credibility of the company. Therefore, the appellant has proved identity, creditworthiness and genuineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. x. Nextgen Infotel Private Limited -- ₹ 1,00,20,000/- The financial statement of the above company reveals the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer, was not satisfactory. It is well settled that in view of section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year, the same may be charged to Income-tax as the income of the assessee of that previous year, if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. 2.29 In the above case the assessee did not furnish any evidence which substantiates his claim. But the appellant company has submitted documentary evidences such as copy of correspondence with the shareholders, bank statements of the shareholders, copy of share application and board resolution. The facts of the above case are different from the appellant company's case. 2.30 Thus, the transaction is genuine and beyond any doubt. The appellant company has proved the genuineness of the transaction and fulfilled the third requirement also of s. 68 of the Act. 2.31 From the above facts and explanation, all the three requirements i.e. identity, creditworthiness and genuineness are fulfilled. Therefore, additions u/s. 68 is bad in law and needs to be delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant company to allot the preference shares. b. Form 2 submitted online to MCA c. Acknowledgment of return of income and financial statement for A.Y. 2010-11 of the subscribers. d. Copy of signed confirmation by the subscribers for making application of preference shares issue of the appellant company. e. Copy of pan card. f. Copy of board resolution and share application in case of M/s. Hindustan Continental Ltd., and Lilac Medicines Pvt. Ltd., g. Latest addresses of the subscribers. 7. The assessee submitted that there was no sufficient opportunity provided in Assessment proceedings and the documents could not be submitted. Further, the evidences and the related documents, registers were destroyed in a fire occurred on 23.02.2011. Therefore, the evidences could not be submitted for the genuine reasons and supported with various judicial decisions. The Ld CIT(A) after receipt of the additional evidences, which was for the first time filed with the appellate authority forwarded the same to the Assessing officer for examination. Whereas, the A.O. has submitted remand report and mentioned that the additional evidence should not be accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A), the A.O. in the remand proceedings has issued notice u/s. 133(6) of the Act on the 11 preference shareholders calling for the information of income tax returns acknowledgement, balance sheet, copy of pan card and signed confirmations. The A.O. observed that the notices were served on the shareholders and the relevant details have been submitted. And all the investor shareholders have confirmed of making investment in the assessee company. The A.O. after receipt of this information has made detailed analysis and found that the shareholders have failed to establish the creditworthiness and genuineness of the transactions. The CIT(A) observed that all the 11 shareholders to whom notices u/s. 133(6) of the Act were issued, filed the details as per directions and to support their identity, has filed the details of their establishment. Further, the shareholders have confirmed the fact of investments and the premium paid. The assessee has substantiated the onus of proving the investors with the evidences, where the investors have complied with the directions of the A.O. u/s. 133(6) of the Act and the details are filed which are not disputed. The assessee has duly complied with the dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the shareholders. It was contended that shareholders were not under command of appellant. They were not ready to come on requests of appellant. c. AO himself has stated in the order that as per the information on the official website of the ROC(MCA) the preference shareholders have continued with the appellant company till 31.03.2012. This, itself, proves the identity of the shareholders as they were registered with ROC and their information was available on the website of the ROC. d. Further during the remand proceeding the notices u/s. 133(6) were duly served to the shareholders and all the shareholders filed their replies with the AO. e. Further in case of M/s. Citygold Education Research Private Limited which is a group concern of the appellant company, same issue was raised for A.Y. 2010-11. The following parties have also invested in M/s. Citygold Education Research Private Limited. a. M/s. Alken Management and Financial Services Pvt. Ltd. b. M/s. Lilac Medicines Pvt. Ltd. c. M/s. Hare Krishna Securities Pvt. Ltd. The above parties are shareholders of the appellant company also. In case of M/s. Citygold Education Research Private Limited,- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion cannot be doubted. C. Further the AO had stated that notices were issued u/s. 133(6) to the bankers, shareholders and submissions received from them. d. It is rightly said by the appellant that AO has not passed any adverse comments on the bank statements of the shareholders. AO had nowhere mentioned that there were immediate cash withdrawals in the bank statement or there were many debit or credit entries. Also, AO has not doubted the fact that the shareholders had enough balance to make the investment in the appellant company. Thus, capacity and credibility of the shareholders is proved beyond any doubt. 6.5.4 Now let's discuss the identity, credibility and genuineness of transactions in respect to individual shareholders: i. Harmony Energy Private Limited a. In the case of M/s. Harmony Energy Private Limited, Baroda (₹ 2,50,80,000) it is seen that the company was incorporated on 17.12.2007 as per PAN card. The financial statement of the said company reveals the following: i. Equity share capital of ₹ 59,50,000 with high reserves and surplus of ₹ 4,99,36,709 ii. Fixed Assets are disclosed at ₹ 22,41,706 and the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merly known as J Kumar Co) and its associate cases on 25.08.2009, it emerged that this was one of the entities which provided bogus entries. d. Also the party has made its submissions before the A.O. in response to notice u/s. 133(6) of the Act, it has confirmed the shares as investment as shown by the appellant. Balance sheet for year ending on 31.03.2010 is filed before the A.O. and the same shows the same figures as stated herein above. In view of this, other observations of the AO are not relevant, though the appellant has satisfactorily replied to them also. Moreover, it was further contended that neither the copy of the statement was provided to the appellant company nor any opportunity of cross examination was provided to the appellant company. e. This not only proves the identity of party but also proves the genuineness of transaction and creditworthiness. Hence addition made in the assessment is not correct. iii. Priority Traders Private Limited a. In the case of M/s. Priority Traders Private Limited (₹ 2,50,80,000) (now known as Choice Exterio Interio Private Limited) it is seen that the company was incorporated on 08.01.1996 as per PAN card. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bservation of the AO that during the course of search action in the case of Shri Shirish Chandrakant Shah and his key employees on 09.04.2013, it emerged that this was one of the entities which provided bogus entries. I agree with the appellant that merely because the said Shirish Chandrakant Shah was providing bogus entries to M/s. Shree Ganesh Spinners Ltd., it does not prove that the said M/s. Shree Ganesh Spinners Ltd. company has made bogus investment in the appellant company. No such confession is available for investment in appellant company. Moreover, it was further contended that neither the copy of the statement was provided to the appellant company nor any opportunity of cross examination was provided to the appellant company. d. This proves the capacity to make investment in the appellant company and also issue shares at premium. The said company is holding shares till date of the appellant company. Thus, there is no rotation of money. e. Also, the party has made its submissions before the AO in response to notice u/s. 133(6) of the Act. It has confirmed the shares as investment as shown by the appellant. Balance sheet for year ending on 31-3-2010 is filed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 7,86,40,000 and has given loans advances of ₹ 49,45,653. iv. During the year, the Company also has a substantial turnover of ₹ 147,50,68,004 and profit during the year (before tax) was ₹ 35,26,517. b. This proves the capacity to make investment in the appellant company and also issue shares at premium. The said company is holding shares till date of the appellant company. Thus, there is no rotation of money. c. Also, the party has made its submissions before the AO in response to notice u/s. 133(6) of the Act. It has confirmed the shares as investment as shown by the appellant. Balance sheet for year ending on 31-3-2010 is filed before the AO and the same shows the same figures as stated herein above. In view of this, other observations of the AO are not relevant, though the appellant as satisfactorily replied to them also d. This not only proves the identity of party but also proves the genuineness of transaction and creditworthiness Hence addition made in the assessment is not correct. Vii. Epson Trading Pvt. ltd., In the case of M/s. Epson Trading pvt. Ltd. (₹ 4,00,80,000) it is seen that the company was incorporated on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company. Thus, there is no rotation of money. c. Also, the party has made its submissions before the AO in response to notice u/s. 133(6) of the Act. It has confirmed the shares as investment as shown by the appellant. Balance sheet for year ending on 31-3-2010 is filed before the AO and the same shows the same figures as stated herein above. In view of this, other observations of the AO are not relevant, though the appellant has satisfactorily replied to them also. d. This not only proves the identity of party but also proves the genuineness of transaction and creditworthiness. Hence addition made in the assessment is not correct. ix. Hare Krishna Securities Private Limited a. In the case of M/s. Hare Krishna Securities Private Limited (₹ 5,00,40,000) it is seen that the company was incorporated on 01.09.1994 as per PAN card. The financial statement of the said company reveals the following: i. Equity share capital of ₹ 96,44,000 with high reserves and surplus of ₹ 11,66,26,828. ii. Fixed Assets are disclosed at ₹ 5,64,489 and the company has cash and bank balance of ₹ 35,22,934. iii. The Company has huge investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. This not only proves the identity of party but also proves the genuineness of transaction and creditworthiness. Hence addition made in the assessment is not correct. xi. Albright Electricals Private Limited a. In the case of M/s. Alibright Electricals Private Limited (₹ 1,50,00,000) it is seen that the company was incorporated on 26.06.1996 as per PAN card. Therefor it is an old company. The financial statement of the said company reveals the following: i. Equity share capital of ₹ 3,40,55,800 with high reserves and surplus of ₹ 46,55,74,437. ii. Fixed Assets are disclosed at ₹ 27,846 and the company has cash and bank balance of ₹ 1,90,23,071. iii. The Company has huge investments of ₹ 61,57,83,042 and has given loans advances of ₹ 1,82,76,260. iv. During the year, the Company also has a substantial turnover/Income of ₹ 6,98,088 and profit during the year (before tax) was ₹ 3,67,142. b. This proves the capacity to make investment in the appellant company and also issue shares at premium. The said company is holding shares till date of the appellant company. Thus, there is no rotation of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the information received in response to notices u/s. 133(6). During appellate proceedings, it was also submitted that at the time of remand proceedings, appellant was ready to produce the principal officer of companies which had subscribed the shares of appellant company but after receipt of information u/s. 133(6) A.O. did not insist for it . 9. Similarly, the Ld CIT(A) supported his views relying on the decision in the assessee's own case for the A.Y. 2012-13. and finally relying on the facts, provisions of law and the case laws, deleted the addition u/s. 68 of the Act and allowed the assessee's appeal. Aggrieved by the CIT(A) order, the revenue has filed an appeal before the Tribunal. 10. At the time of hearing, the Ld. DR submitted that the Ld. CIT(A) has erred in accepting and admitting the additional evidences overlooking the fact that the assessee was provided ample opportunities in the course of assessment proceedings. CIT(A) overlooked the findings of the A.O. irrespective of additional evidences considered in the remand report. Further, the Ld CIT(A) erred on his views that the assessee could not substantiate in the remand proceedings, the genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premium and also the creditworthiness and genuineness of the transaction and was not disputed by the A.O. The assessee has cooperated in submitting the information and had not disobeyed the directions of the revenue. The investors, to whom the summons u/sec 131 of the Act were issued have not appeared for various reasons but the assessee has filed the details through the letters, including the compliances made under companies Act and KYC norms under the Banking Regulations. The assessee has discharged his burden of onus of proof, on submitting the details but due to non availability of information due to fire mishap on 23.12.2011, it was delayed. Whereas, the A.O. was not satisfied with the claims and the notices issued u/s. 133(6) of the Act on the investors were returned un-served in some cases, and in some cases no reply has been received. Whereas, the assessee in the appellate proceedings before the CIT(A) has filed a detailed written submissions in respect of all 11 investors to substantiate the ingredients of identity of the investors, creditworthiness and genuineness of the transaction of shares. Whereas the CIT(A) on receipt of the information filed by the assessee for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ministry of Corporate Affairs (MCA) data the details were filed explaining the status of these companies by way of chart is as under: Citygold farming Pvt. ltd. Name of the Company Status Azure Exim Services ltd (formerly; Hindustan Continental Ltd.,) Active Nextgen Infotel Pvt Ltd Active Accelerate Trader Pvt Ltd (Formerly; Choice Exterio and interio Pvt ltd Earlier: Priority Traders pvt Ltd.) Amalgamated Epson Trading Pvt ltd Active Harekrishna Securities Pvt Ltd Active Tac Technosof t pvt Ltd., Active Yantra natural Resources Ltd (Formerly: Shri Ganesh Spinners ltd.,) Active Hormony Energy Pvt Ltd Amalgamated Alken Managemnet and financial services Pvt ltd Amalgamated Lilac Medicines Pvt Ltd., Amalgamated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cumulative convertible preference shares. In compliance, all the 11 investors have filed the details and complied with the directions of the A.O. in the remand proceedings. Further, the A.O. has made his observations in the remand report that the assessee and investors have cooperated in submitting the information and the assessee was provided opportunity to substantiate the objections raised by the A.O. At this point of time, we consider that the CIT(A) has powers to admit the additional evidence as it goes to the root of the case and the A.O. was provided time for verification and examination of the evidences filed in the course of appellate proceedings. The CIT(A) has admitted the additional evidence relying on the facts and the judicial decisions in particular of Coordinate Bench of Hon'ble tribunal in the case of Shahrukh Khan and DCIT (Supra), where it was held, that after calling for remand report from the A.O. on merits as envisaged in Rule 46A of IT Rules, 1962, the CIT(A) has no discretion to refuse to admit the additional evidence. Considering the overall facts in respect of admission of additional evidence, the Ld CIT(A) plays a vital role in exercising his powers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted the details. Whereas, the A.O. observed that the information submitted does not satisfy the requirements u/s. 68 of the Act. The Ld. AR submitted that in assessee's own case for the A.Y. 2012-13 the Hon'ble Tribunal in ITA No. 4751/M/2015, A.Y. 2012-13 dated 14.04.2017 has remanded the matter to the file of the A.O. as the CIT(A) has not called for any report for verification of the details, the relevant operative portion of the order of the Tribunal is as under: 6. We have heard the rival contentions of both the parties. We find that during the course before the Ld. CIT(A), the assessee has submitted own bank statement reflecting the said payment, ledger account of lender and balance confirmation but Ld. CIT(A) has not called for the remand report or the ld. CIT(A) has not verified these details. The Ld. CIT(A) has, simply relying upon the judgment of Hon'ble Guwahati High Court in the case of Nemi Chand Kothari Vs. CIT (2014) 264 ITR 254, deleted the addition. Therefore, we reverse the finding of Ld. CIT(A) and restore this matter back to the file of AO and the AO is directed to decide the matter afresh, as per law . 15. The Ld. AR submitted that, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amounts of investments are really those of the assessee, which have been ploughed back by the assessee. But the settle principle of law is that any amount of suspicion however, it strong might be, is no substitute for proof. Suspicion is not sufficient enough to lead to the conclusion that the investments received by the assessee company are all manipulated receipts and on that basis he can record a finding that the explanation of the assessee is not satisfactory. According to us, so long as the proof and identity of the investor and the payment received from him is through a doubtless channel like that of a banking channel, the receipt in the hands of the assessee towards share capital or share premium does not change its colour. The money so invested in the assessee company would still be the money available and belonging to the investors. The consistent principle followed is that the investors sources and creditworthiness cannot be explained by the assessee. If the Department has a doubt about the genuineness of the investor's capacity, it is open to it to proceed against those investors. Without taking such a course of action, the AO proceeded on conjectures and surmises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming the pre-proviso Section 68 of the Act laid down by the Courts namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned order of the Tribunal and on facts it was found satisfied. Further it was a submission on behalf of the Revenue that such large amount of share premium gives rise to suspicion on the genuineness (identity) of the shareholders i.e. they are bogus. The Apex Court in Lovely Exports (P.) Ltd. (supra) in the context to the pre-amended Section 68 of the Act has held that where the Revenue urges that the amount of share application money has been received from bogus shareholders then it is for the Income Tax Officer to proceed by reopening the assessment of such shareholders and assessing them to tax in accordance with law. It does not entitle the Revenue to add the same to the assessee's income as unexplained cash credit. (f) In the above circumstances and particularly in view of the concurrent finding of fact arrived at by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the register of Registrar Of Companies. In view of these facts, we reach to a conclusion that this is existing company and even the investors are existing. 11. In view of the above facts and circumstances of the case, we are of the view that CIT(A) has rightly deleted the addition and we confirm the same. This issue of revenue's appeal is dismissed. 16. We find that the assessee company has received the share capital along with the share premium and in the remand proceedings the investors have submitted income tax return copies, financial statements and copy of Pan card and confirmation of investments which are not disputed by the Revenue. The Assessing officer after receipt of the evidences has examined the details and was satisfied with the explanations on the identity of the investors and disagreed with the genuineness and credit worthiness of the transactions. Whereas, the Ld CIT(A) has dealt on the facts, details and law and examined the remand report and has relied in his own order for the A.Y. 2012-13 and granted the relief. The Ld.AR also relied on the decision of the coordinate Bench of Hon'ble Tribunal in the case of ITO Vs. Sidhivinayaka Filaments Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elief to the assessee, we do not deem it fit to interfere in the said order of the ld. CIT(A). Accordingly, ground No. 2 raised by the revenue is dismissed. 10. In the result, appeal of the revenue is dismissed . 17. We find that the Ld. AR has substantiated his arguments with the judicial decisions and the material facts with the evidences which cannot be disputed and the Ld. CIT(A) has also considered the legal aspects and the remand report and took a reasonable decision. We also find that in respect of third ground raised by the revenue, that the CIT(A) has not considered the findings of the A.O. in the remand report in respect of two investors who have nothing to do with the investment but only accommodating operations. Whereas, the Ld CIT(A) having received the remand report has dealt at para 6.4.1 of the order, where these companies have been tested and investigated by the DDIT, (Inv) Ahmedabad and the documentary evidence was filed. The observations of the CIT(A) at para 6.4.1 and 6.4.2 at page 15 and 16 are as under: 6.4.1. Further the appellant company has referred to the case of Citygold Education Research Limited wherein the same issue was raised for A.Y. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make investments in assessee company as it was proved in the case of the investigation at Ahmedabad and Baroda. The CIT(A) also observed that the assessee has discharged his onus of burden of proof in respect of identity of investor, creditworthiness and genuineness of the transaction. We find the Jurisdictional Hon'ble High Court in the case of Pr. CIT vs. Ami Industries India Pvt. Ltd., 2020, 116 taxmann.com 34 (Mumbai) dated 29.01.2020, where the similar facts of the present case were dealt by the Hon'ble Jurisdictional High Court at para 14 to 24 which reads as under: 14. Section 68 of the Act has received considerable judicial attention through various pronouncements of the Courts. It is now well settled that under Section 68 of the Act, the assessee is required to prove identity of the creditor; genuineness of the transaction; and credit worthiness of the creditor. In fact, in NRA Iron Steel (P) Ltd. (supra), Supreme Court surveyed the relevant judgments and culled out the following principles:- 11. The principles which emerge where sums of money are credited as Share Capital/Premium are: The assessee is under a legal obligation to prove the genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not ipso facto mean that the creditors had no credit worthiness. In such circumstances, the first appellate authority held that where all material evidence in support of explanation of credits in terms of identity, genuineness of the transaction and creditworthiness of the creditors were available, without any infirmity in such evidence and the explanation required under Section 68 of the Act having been discharged, Assessing Officer was not justified in making the additions. Therefore, the additions were deleted. 19. In appeal, Tribunal noted that before the Assessing Officer, assessee had submitted the following documents of the three creditors:- a) PAN number of the companies; b) Copies of Income Tax return filed by these three companies for assessment year 2010-11; c) Confirmation Letter in respect of share application money paid by them; and d) Copy of Bank Statement through which cheques were issued. 20. Tribunal noted that Assessing Officer had referred the matter to the investigation wing of the department at Kolkata for making inquiries into the three creditors from whom share application money was received. Though report from the inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he creditors were not in doubt. Assessee had furnished PAN, copies of the income tax returns of the creditors as well as copy of bank accounts of the three creditors in which the share application money was deposited in order to prove genuineness of the transactions. In so far credit worthiness of the creditors were concerned, Tribunal recorded that bank accounts of the creditors showed that the creditors had funds to make payments for share application money and in this regard, resolutions were also passed by the Board of Directors of the three creditors. Though, assessee was not required to prove source of the source, nonetheless, Tribunal took the view that Assessing Officer had made inquiries through the investigation wing of the department at Kolkata and collected all the materials which proved source of the source. 22. In NRA Iron Steel (P) Ltd. (supra), the Assessing Officer had made independent and detailed inquiry including survey of the investor companies. The field report revealed that the shareholders were either nonexistent or lacked credit-worthiness. It is in these circumstances, Supreme Court held that the onus to establish identity of the investor companies ..... X X X X Extracts X X X X X X X X Extracts X X X X
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