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TMI Blog2021 (6) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... d:- 22-6-2021 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For the Assessee : None For the Revenue : Smt. Monisha Choudhary (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Alwar dated 17.10.2016 relevant for the assessment year 2012- 13 wherein the assessee has raised the following ground of appeal:- 1. The Ld. CIT(A) has erred on facts and in law in confirming an addition of ₹ 1,60,88,000/- by observing that share along with premium was issued to M/s Emmthree Financial Services Pvt. Ltd. without realizing the money in a fair and transparent manner and therefore AO was justified in treating the share capital along with sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material available on record. 3. Briefly the facts of the case are that during the course of assessment proceedings, the Assessing Officer observed that there has been infusion of fresh funds in the form of share application money amounting to ₹ 2,01,100/- and share premium amount of ₹ 1,58,86,900/-in the books of assessee company. The matter was thereafter examined by the Assessing Officer calling for information U/s 133(6) as well as recording statement of the Director of the assessee-company who also happens to be Director of the investor company, thereafter addition of ₹ 1,60,88,000/- was made U/s 68 of the Act. The relevant findings of the AO are contained at para 4 of the assessment order which read as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.K. Bhargava who is the Director in both the companies M/s M/s Aditya Infrarealators Ltd., Alwar and M/s Emmthree Financial Services Pvt Ltd, New Delhi is the key person who makes financial arrangements conveniently to transfer the unaccounted money and to avoid the taxability. In this case shares of ₹ 10 were applied at a premium of ₹ 790. There is no apparent reason as to why such huge amount of share premium would be paid for obtaining share of face value of ₹ 10. Any prudent person who makes investment in shares would make the investment in accordance with the fair market value of the shares and also consider the book value of the share, earning per share and book profit of the company. As the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under hand and unaccounted money, and prima facie it appears as the book profit of the company is nil and the company is in loss who will want to make investment in as such company but a huge amount of ₹ 1,60,88,000/-has been invested on a high share premium of ₹ 790/-. On the other hand the company M/s Emmthree Financial Services Pvt. Ltd who have subscribed is also in loss. Hence just because the share application with huge and unjustified share premium was received from M/s Emmthree Financial Services Pvt. Ltd against its so called debts and investment made in properties is not tenable on the facts and circumstances of the case. The contents of the above para clearly throws light on the modus operandi adopted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. That during the year under consideration, the appellant company had issued to M/s. Emmthree Financial Services Pvt. Ltd, a total of 20,110 shares of face value of ₹ 10/- per share at a premium of ₹ 790/- per share totaling to ₹ 1,60,88,000/- . 4. That while looking at the share transaction, it is found that share premium was determined without any basis. It is a limited company but there are parameters to value a share. Share value cannot be determined without any basis. In this case looking at the balance sheets, the value of share premium does not match with the worth of the company. 5. That it has further been found that the entire transaction of share issuance by the appellant company to M/s Emmthree Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business without paying due taxes. The appellant company enjoyed the benefit of the properties and in lieu of it issued share at a premium not commensurating with the balance sheet of the company. The cheque issued to the beneficiary of the shares i.e. M/s Emmthree Services Pvt. Ltd. was also not encashed. That amply points towards a fact that shares were issued without realizing the money in a fair and transparent manner. Therefore, A.O is quite justified in treating shares capital along with the share premium money shown received by the appellant company as unexplained under section 68 of the Act. The entire chain of transactions, to my mind is aimed at evading due income tax. Accordingly, the addition of ₹ 1,60,88,000/- is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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