9911796707
TMI Blog2018 (3) TMI 1924X X X X Extracts X X X X X X X X Extracts X X X X ..... the bank transactions carried out by the investor companies with the assessee company and for the purpose of justifying the amount of sum received from any party, the responsibility falls on the assessee - bank statements are found from the assessee. Even otherwise, the assessee itself has submitted these bank statements before the AO who would have any doubt about the veracity of the bank statements, he should have issued commission to the Bankers and summons to the directors of these investor companies which have not been done. The bank accounts of the companies, therefore, do not lead to any inference that the investment made by these companies is accommodation entry in the hands of the assessee. The next documents are affidavits of the directors of investor companies, stating that their company has applied for equity shares. This itself is a statement that the investment has been made by those companies. These affidavits were not found either bogus, sworn by different persons other than the directors of the companies nor disclosed anything else other than that declared in the accounts of the companies and these affidavits are, in fact, supporting the transactions. Had th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the addition made u/s. 68 in the hands of the assessee cannot be sustained. Addition on account of excess money paid towards purchase of agricultural land - HELD THAT:- Admittedly, the assessee surrendered a sum of ₹ 7,50,00,000/- on account of peak investment of diaries seized during the course of search, which stood accepted by the Revenue authorities as business income of assessee. It is also an admitted fact that the actual peak amount worked out to ₹ 7,20,41,208/-. Therefore, the surplus amount of ₹ 29,58,792/-, admittedly, being the business income of the assessee, in our considered opinion, should be deemed to be the source of excess amount paid for purchase of agricultural land and shall take care of it. Hence, there was no need to make separate addition on this account. Accordingly, the addition deserves to be deleted. As a result, the appeal of the assessee is found full of merits and deserves to be allowed. - ITA No. 1451 to 1453/Del./2013 - - - Dated:- 1-3-2018 - Shri Bhavnesh Saini And Shri L.P. Sahu, JJ. Appellant by : S/Shri Amol Sinha, Adv., Ashok Kr Jain and Ashu Goel, C.A. Respondent by: Smt. Simran Bhullar, CIT/DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leted and the credit for surplus of ₹ 29,58,792 be adjusted against any other addition. 4. Without prejudice to Ground No. 1 to 3, the Ld AO is not justified in not giving credit of surplus amount of surrendered income of ₹ 29,58,792 against addition of ₹ 5,70,000 made on account of excess money paid towards purchase of agriculture land which is arbitrary, against principles of natural justice and contrary to facts and provision of law. 4. Ground No. 1 of appeal is general in nature and therefore, the same is dismissed. 5. The brief facts of the case are that the assessee is a private limited company engaged in manufacturing, processing, trading and export of rice and its byproducts. On 07.07.2009, a search u/s. 132 of the Act was carried out on Galaxy Group (Goel Family) and the assessee is one of the concerns in that group. Therefore, notice u/s. 153A of the Act was issued on 03.03.2010, against which the assessee filed its return of income stating that the return filed on 30.09.2009 and later on revised on 03.10.2009 may be treated as return filed in response to notice u/s. 153A of the Act. 5.1 The learned Assessing Officer perused the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the addresses given at the Website of Ministry of Corporate Affairs. The Income-tax returns of the companies who had invested into the shares do not have actual turnover. Therefore, relying on the decision of Hon ble Supreme Court in the case of CIT vs. Durga Prasad More, 82 ITR 801, the ld. Assessing Officer held that the assessee has failed to establish the identity and creditworthiness and genuineness of the transactions of all the capital introducing companies. He held that no such companies exist in actual, but only exist on paper and such companies are bogus. Consequently, the addition of ₹ 5.30 crores was made. However, as, there is a disclosure of ₹ 7.5 crores made by the assessee on account of peak investment in the diaries and where the actual peak is only ₹ 7.20 crores, he gave the credit to the assessee of ₹ 29.58 lacs and made the net addition of ₹ 5,00,41,208/- in the hands of the assessee. The main grounds on which the addition has been made is as under : 5. Perusal of the return of income/ accompanying documents and documents seized reveal that the assessee has introduced the following paid up share capital from the below ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21000 1890000 13 VAIRAVI ELECTRICAL (P) LTD., 420115 16-10-2008 2500000 25000 2250000 14 ALISHAN COMPLEX (P) LTD., 417500 13-10-2008 2500000 25000 2250000 15 CRM SYSTEMS (P) LTD 419979 16- 10- 2008 2500000 25000 2250000 16 MARUBHUMI FINANCE a DEVELOPERS (P) , LTD. 418140 13-10-2008 2500000 25000 2250000 17 MAHASHAKTI COMMODITIES P. LTD 420329 13-10-2008 2500000 25000 2250000 18 APOORVA LEASING FINANCE a INVESTMENT CO LTD., 16526 29-10-2008 3000000 30000 2700000 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted to file the requisite information. 5.3 In response, the assessee vide its written submissions dated 30.08.2011 has submitted as under:- With a view to augment resources and seeking private funding for the business which is normal procedure and practice in the trade, .some finance companies were approached. These finance companies offered to purchase equity shares in the assessee company as 'per terms and conditions and also the prevailing trends of the market. Shares were issued to these companies and return of allotment in respect. of the shares so allotted was also . filed with Registrar of Companies. The sums against the shares capital were received by the assessee company by way of cheque. The transaction of issue of shares was normal routine, within four corners of law and was undertaken as per prescription of law and was governed by provisions of Companies Act. As a part of the deal, it was offered to the investing companies that at the end of the tenure of 3 years the same would be refunded to them at a premium of 25% with an option to repurchase at any time. However on account of change in the business plan of the investors and their inability to retain i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the record of these companies can be summoned and examined from respective income tax Wards as well as from the Registrar of Companies for verifying the genuineness of the companies. 5.5 In support of its written submissions filed during the assessment proceedings, the assessee, besides relying upon various judicial pronouncements, has also placed reliance upon the following judgements in which it has been adjudicated that the addition on account of share capital introduced can not be made in the hands of the assessee:- COMMISSIONER OF INCOME TAX vs. LOVELY EXPORTS (P) LTD . 216 CTR 195: SUPREME COURT OF INDIA (2008) OASIS HOSP1TALITIE5(P)LTD. COMMISSIONER OF INCOME TAX vs. (2011) 238 CTR (Del) 402 : (2011) 333 ITR 119 : (2011) 198 TAXMAN 402 : (2011) 51 DTR 74 5.6 Perusal of the reply-of the assessee, the case laws relied upon, the documents filed in support of its contention and ail the other supporting documents filed during the course of assessment proceedings has been made and after verification of the same, it has emerged that the contentions of the assessee have no force at all owing to the following observations:- i) The corrobor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 106,Palco house T10, Main Patel road, patel Nagar new Delhi. iv) Addresses of the Directors of some of the Companies are the same v) Serial no. of some of the stamp paper of selling shares is seen to be earlier than the serial no. of purchase of shares such as in case of companies based in Kolkata it is seen from the seized documents that the stamp paper is dated 2009 whereas the contents of the stamp paper say that the document belongs to 2008. vi) Details of the above companies which have invested in M/s Goel International Pvt. Ltd. have been cross checked from the website of Ministry of Corporate affairs and it is seen that in case of some companies ,the addresses mentioned on the website is different from the address mentioned in the returns/affidavits. Also in case of companies based in Kolkata , the email-ids of all the companies are same. vi) Regarding the purpose of maintenance of blank share transfer form at the residence of the Director of the assessee, the assessee has stated the following:- As apart of the deal, it was offered to the investing companies that at the end of the tenure of 3 years the same would be refunded to them at a premium of 25% with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed by the assessee. ix) The case laws relied on by the assessee are not at all applicable in the ease of the assessee as the question in the instant case is not of assessment of introduction of. share capital from certain companies but the question is of creditworthiness of share capital. Secondly, the facts of the case of Lovely Exports is different from that in the instant case since the company Lovely Exports is a Public limited company and the assessee company is a Private company . 5.7 Keeping in view the above facts and the circumstantial evidence found at the time of search, it can clearly be held that the assessee has used colorable device for introducing its unaccounted money to its books of account through entry operators. The identity, creditworthiness and genuineness of transaction of the capital introducing companies are not established by the assessee. No such company exists in actual. The share capital introducing companies only exist on papers and such companies are bogus. 5.8 As regards assessee's contention that the addition on account of share capital can not be made in the hands of the assessee, in a recent judgement delivered by the Hon'ble P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set, for the sake of clarity and easy reference the list of companies who had invested in the share of the assessee company are listed below : Sr. No. Name of the share holder Amount 1. SHALANI HOLDINGS LTD. 25,00,000/- 2 EURO ASIA MERCANTILE (P) LTD 25,00,000/- 3 AD-FIN CAPITAL SERVICES INDIA (P) Ltd. 27,00,000/- 4. MANI MALA DELHI PROPERTIES (P) LTD. 29,00,000/- 5 EAGLE INFRATECH (P) LTD 28,00,000/- 6. ZENITH AUTOMOTIVE (P) LTD. 22,00,000/- 7 HUM TUM MARKETING (P) LTD. 23,00,000/- 8 LUTUS REALCON (P) LTD. 26,00,000/- 9. VICTORIA SOFTWARE (P) LTD. 24,00,000/- 10 VERGIN CAPITAL (P) Ltd. 25,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o which assessee filed copies of bank statements, copies of accounts of the investors, complete addresses of the companies, their PAN and list of Directors, masterdata and details of signatories to prove the existence of the companies. On a further perusal of the very crucial documents seized from the residential premises of the assessee, it further suggests that in the bank statements of the investing companies, there were deposits/transfer entries in the bank accounts. Further blank share transfer forms were also found at the assessee s premises. The addresses of the Directors of the some of the companies were also the same, apart from common addresses of the companies. Significantly, the serial nos. in some of the stamp papers of selling shares were observed to be even earlier than the purchases by the companies based in Kolkata. The stamp papers were dated 2009 whereas the contents of the stamp paper were of 2008. The AO s attempt to ascertain the addresses given by the assessee from the website of the Ministry of Corporate Affairs indicated that in case of some of the companies, the addresses mentioned in the website were different from the addresses mentioned in the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the assessment order is silent on the summon issued u/s 131 of the I. T. Act to the companies on the alleged share application money because of the fact that the evidences gathered during the course of search in the form of Annexure A-3, A-6, A-7, A-9 to A-14 seized during the course of search established that the assessee company had taken accommodation entries from various companies whose details have been given in the Assessment Order Para 5.6 are reproduced for your kind perusal. Perusal of the reply of the assessee, the case laws relied upon, the documents filed in support of its contention and all the other supporting documents filed during the course of assessment proceedings has been made and after verification of the same, it has emerged that the contentions of the assessee have no force at all owing to the following observations:- i) The corroborative evidences suspected to be accommodation entries were found and seized from the premises of the assessee company, are as per the following details: Sr. No Description of the documents Annexure No. 1. Memorandum and A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the seized documents that the stamp paper is dated 2009 whereas the contents of the stamp paper say that the document belongs to 2008. vi) Details of the above companies which have invested in M/s Goel International Pvt. Ltd. have been cross checked from the website of Ministry of Corporate affairs and it is seen that in case of some companies ,the addresses mentioned on the website is different from the address mentioned in the returns/affidavits. Also in case of companies based in Kolkata , the email-ids of all the companies are same. vi) Regarding the purpose of maintenance of blank share transfer form at the residence of the Director of the assessee, the assessee has stated the following:- As a part of the deal, it was offered to the investing companies that at the end of the tenure of 3 years the same would be refunded to them at a premium of 25% with an option to repurchase at any time. However on account of change in the business plan of the investors and their inability to retain investment, negotiations were made with our company to refund the amounts already invested. These investing companies were asked to submit specific documents which included a request ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Lovely Exports is different from that in the instant case since the company Lovely Exports is a Public limited company and the assessee company is a Private company . It may kindly be also noted that during the course of the statement recorded u/s 132(4), Shri Vijay Goyal one of the Director of the company had already surrendered the share application money before the Income Tax Authorities as his own money. In this regard, para 6.2 his statement recorded on 29.07.2009 may kindly be seen . Para 6.2 and 6.3 of the assessment order have reproduced the statement of Shri Vijay Goyal in this regard. As regard to the statement given u/s 132(4) of the I.T. Act, the AO has also relied upon the various judgments like i) Hira Lal Madan Lal Co Vs. Dy. CIT (2005) 96ITD 113, II) V.K. Kunhamber Vs. CIT (1996) 219ITR 235 (Ker.), iii) DCIT Vs. BhogilalaMalchand 96 ITD 344 [Ahmadabad Bench] and iv) Green View Restaurant Vs. ACIT 263 ITR 169 [High Court of Gauhati]. The assessee has failed to provide any such evidence which supports that the statement u/s 132(4) was given under stress / undue pressure or by coercion. Further no retraction of the statement was made either befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Bank statement showing that payment through account payee cheques. -No cash deposited in bank to make payment -Confirmation confirming the transactions c) Creditworthiness: -Copy of Bank statement showing source of payment. -No cash deposited in bank to make payment. -Copy of Audited Balance Sheet on 31.03.2009 showing Net Worth of company. -Copy of ITR 2 Euro Asia Mercantile Pvt. Ltd.,3198/15, 4th Floor, Gali No. 1, Sangatrashan, Pahar Ganj, New Delhi-110055 a) Identity: -Summon duly served in said address -Copy of ITR for A.Y.2009-10 -Copy of Bank statement b) Genuineness of transactions:- -Bank statement showing that payment through account payee cheques. -No cash deposited in bank to make payment - Confirmation confirming the transactions c) Creditworthiness : -Copy of Bank statement showing source of payment. -No cash deposited in bank to make payment. -Copy of Audited Balance Sheet on 31.03.2009 showing Net Worth of company. -Copy of ITR 3 Apoorva Leasing Fin. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anot Plaza, 3, D.B.Gupta Road, New Delhi-110055. a) Identity: -Summon duly served in said address -Copy of ITR for A.Y.2009-10 -Copy of Bank statement b) Genuineness of transactions:- -Bank statement showing that payment through account payee cheques. -No cash deposited in bank to make payment -Confirmation confirming the transactions c) Creditworthiness: -Copy of Bank statement showing source of payment. -No cash deposited in bank to make payment. -Copy of Audited Balance Sheet on 31.03.2009 showing Net Worth of company. -Copy of ITR 7 Lotus Realcon Pvt. Ltd., 209, Bhanot Plaza, 3, D.B. Gupta Road, New Delhi-110055. a) Identity: -Summon duly served in said address - Copy of ITR for A.Y.2009-10 Copy of Bank statement b) Genuineness of transactions:- -Bank statement showing that payment through account payee cheques. -No cash deposited in bank to make payment -Confirmation confirming the transactions c) Creditworthiness: -Copy of Bank statement showing source of payment. -No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing Net Worth of company. -Copy of ITR 11 Virgin Capital Services Pvt. Ltd., 106, Palco House, T-10, Main Patel Road, Patel Nagar, New Delhi-110008. a) Identity: -Summon duly served in said address - Copy of ITR for A.Y.2009-10 -Copy of Bank statement b) Genuineness of transactions:- -Bank statement showing that payment through account payee cheques. -No cash deposited in bank to make payment -Confirmation confirming the transactions c) Creditworthiness : -Copy of Bank statement showing source of payment -No cash deposited in bank to make payment. - Copy of Audited Balance Sheet on 31.03.2009 showing Net Worth of company. -Copy of ITR -Copy of Assessment Order U/s 143(3) 12 Sri Amarnath Finance Ltd., 22, Rajendra Park, New Delhi-110060 a) Identity: -Summon duly served in said address - Copy of ITR for A.Y.2009-10 -Copy of Bank statement b) Genuineness of transactions:- -Bank statement showing that payment through account payee cheques. -No cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iota of evidence with Ld AO either in the form of any tangible evidence or statement of any share applicant or any other person to doubt the genuineness of share capital raised. As such, the ratio of case laws relied upon by Ld AO and Ld CIT(A) including the case of Nova Promoters Pvt. Ltd. is not applicable to the facts of the case of appellant. vi). It is held by Hon'ble Delhi High Court in the case of Five Vision Promoters Pvt. Ltd. 380 ITR 289 (Del){2016) that Mere fact that some of investors in share capital of assessee-company had a common address was not a valid basis to doubt their identity or genuineness, nor fact that shares of assessee were subsequently sold at a reduced price was germane to question of genuineness of investment in share capital of assessee . Reliance is placed on following case laws: 1. TRN Energy Pvt. Ltd. (ITA No. 453/Del/2016 dated 01.01.2018) (Del-ITAT) - Copy enclosed Held Where the assessee filed complete details to prove Identity, Genuineness and Creditworthiness of share capital raised U/s 68 of the Income Tax Act'1961 and the id AO did not make any further enquiry then the assessee discharge its onus to prove Identity, Genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. M/s. Shalini Holdings Limited, 209, 2nd Floor, 6/41, Sunder Kiran, Building, W.E.A. Karol Bagh, New Delhi-110005 AAACS0913M 8(1) 127,480,000 1,121,250,000 127,480,000 1,121,250,000 835,612 609,995 TOTAL 1,248,730,00 0 1,248,730,00 0 835,612 609,995 2 Euro Asia Mercantile Pvt. Limited, 3198/15, Gali nNo. 1, 4th Floor, Sangatrashan Pahar Ganj, Delhi-110005 AABCE7522P 11(2) 48,200,000 432,942,084 48,200,000 432,920,676 559,330 328,250 TOTAL 481,142,084 481,120,676 559,330 328,250 3 Ad Fin capital Services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 174,277,448 19,460,000 174,257,968 528,365 237,780 TOTAL 193,737,448 169,747,000 528,365 237,780 8. Lotus Realcon Pvt. Ltd., 209, Bhanot PlazaII, 3 D.B. Gupta, Road, New Delhi 110005 AABCL3054H 4(4) 17,240,000 154,292,740 17,240,000 154,274,258 573,900 292,065 TOTAL 171,532,740 171,514,258 573,900 292,065 9. Victory Software Pvt. Ltd., 3198/15, 4th floor, Gali No. 1, Sangatrashan, Parah ganj, New Delhi 110008 AACCV4613R 17(1) 19,230,000 172,198,439 19,230,000 172,188,620 419,412 249, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99,600,000 27,790 15. CRM Systems Pvt. Limited, 10A, Hospital Street, Kolkata, West Bengal700072 AACCC4574C 1(4) 12,100,000 108,000,000 387998812 TOTAL 120,100,000 387998812 16 Marubhumi Finance Developers Pvt. Ltd., 9 Jagmohan Mullick Lone, Kolkata- 700007 AACCM2069C 9(1) 5,259,200 9,270,000 658,543 TOTAL 14,529,200 658,543 17. Mahashakti Commodities Pvt. Ltd., 9 Jagmohan Mullick Lone, Kolkata- 700007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und existing at the addresses given to the Assessing Officer. He stated that if there would have been any discrepancy in the addresses, summons could not have been received by these parties. He further stated that all the summons were duly complied with by the investor companies by providing necessary details, which is not disputed by the lower authorities. 6.4 He further stated that the assessee has submitted complete bank accounts of the parties. However, the Assessing Officer could not point out a single instance wherein the cash is deposited in the account of those companies. 6.5 He further stated that merely because some of the companies have same addresses, cannot be the reason for making the addition. He further stated that merely because they have common directors also do not go against the assessee. 6.6 He further stated that the allegation of the Assessing Officer with respect to the stamp papers does not deserve any credence for the reason that there is no transaction of purchase and sale of shares. 6.7 He further stated that the details of the documents found have been explained by the assessee that as the assessee had promised them to invest into the shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of the lower authorities. Admittedly, search took place on 07.07.2009, which concluded on 08.07.2009. Admittedly, the assessee or any of its directors did not make any statement u/s. 132(4) of the IT Act. On 07.07.2009, a letter was addressed by Shri Vijay Goel to the Additional Director of Income Tax (Inv.), surrendering a sum of ₹ 27 crores. Further, on 14.07.2009, the assessee submitted a letter giving bifurcation of the above sum. The assessee time to time has submitted even during the course of search as well as post search enquiries that the documents shall be explained in detail during the course of assessment proceedings. Admittedly, during the year, the assessee has issued a share capital of face value of ₹ 5.30 crores at a premium of ₹ 4.77 lacs to 21 companies. The share considerations have been received by cheques in the month of October, 2008 from the bank account of all these companies. During the course of assessment proceedings, the assessee submitted the confirmations, copy of income-tax returns, copy of memorandum, bank statement, copy of audited balance sheets of all these companies. The summons were issued to all the companies, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r companies, stating that their company has applied for equity shares. This itself is a statement that the investment has been made by those companies. These affidavits were not found either bogus, sworn by different persons other than the directors of the companies nor disclosed anything else other than that declared in the accounts of the companies and these affidavits are, in fact, supporting the transactions. If the Assessing Officer had any doubt on the affidavits, he should have either called on the persons who have sworn such affidavits or the Notaries who have notarized such affidavits. Even otherwise, what is stated in the books of investor companies has been stated by the directors of these companies on affidavit. We do not find any reason that merely because the directors of the depositor companies have prepared affidavit, it becomes an accommodation entry. Most of the times, to establish cash credits, even the Revenue is asking for the affidavits of the depositors. Therefore, on the basis of the affidavits, no adverse inference could be drawn. 9.4 Furthermore, three blank documents were found with respect to these companies. These are blank share transfer forms, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erely raised assumptions and presumptions. The addition made by the ld. Assessing Officer has become unsustainable in the hands of the assessee due to lack of enquiry or any efforts on the part of the AO. In this regard, we are also constrained to refer the amendment made to the provisions of section 68 of the IT Act by Finance Act, 2012 by inserting a proviso w.e.f. 01.04.2013 that additional burden has been cast on the assessee to prove in the similar circumstances, if no explanation is offered by the investor or such explanation offered by the investor is not satisfactory. However, our hands are tied, as the impugned assessment years before us are assessment years 2007-08 to 2009-10. It is also not argued before us that this proviso is retrospective in nature. Therefore, it is apparent that prior to assessment year 2013-14, the onus of explaining the transaction cannot be expanded in the hands of the assessee. Further several judicial precedents also supports the case of the assessee:- i. Honourabel Delhi High court in case of [2017] 397 ITR 106Pr. Commissioner of Income Tax-5 Versus Laxman Industrial Resources Ltd. ITA 169/2017, C.M. APPL.7385/2017 Dated: - 14 March 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished to him. It was highlighted that the Assessing Officer took note of the statement made by the individual styled as director, disowning the investment made in the assessee-company by M/s. Creative Financial Services Pvt. Ltd. 9. This court is of the opinion that the lone circumstance of a director disowning the document per se could not have constituted a fresh material to reject the documentary evidence. In this case, the existence of the company as an Income-tax assessee, and that it had furnished audited accounts is not in dispute. Furthermore, its bank details too were furnished to the Assessing Officer. If the Assessing Officer were to conduct his task diligently, he ought to have at least sought the material by way of bank statements, etc., to discern whether in fact the amounts were infused into the shareholder's account in cash at any point of time or that the amount of ₹ 1.3 crores in the case of M/s. Creative Financial Services Pvt. Ltd. and ₹ 3.7 crores in the case of other share applicants were such as to be beyond their means. In the absence of any such enquiry, the court is of the opinion that the findings holding that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii. Decision of Hon ble Madhya Pradesh High Court in the case of CIT vs. Peoples General Hospital Ltd., (2013) 356 ITR 65, in which it was held as under : Dismissing the appeals, that if the assessee had received subscriptions to the public or rights issue through banking channels and furnished complete details of the shareholders, no addition could be made under section 68 of the Income-tax Act, 1961, in the absence of any positive material or evidence to indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represented the company's own income from undisclosed sources. It was nobody's case that the non-resident Indian company was a bogus or non-existent company or that the amount subscribed by the company by way of share subscription was in fact the money of the assessee. The assessee had established the identity of the investor who had provided the share subscription and that the transaction was genuine. Though the assessee's contention was that the creditworthiness of the creditor was also established, in this case, the establishment of the identity of the investor alone was to be seen. Thus, the addition was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court: Held, dismissing the appeals, that the deletion of addition was justified. x. Decision of Hon ble Delhi High Court in the case of CIT vs. Winstral Petrochemicals P. Ltd., 330 ITR 603, in which it was held as under : Dismissing the appeal, that it had not been disputed that the share application money was received by the assessee-company by way of account payee cheques, through normal banking channels. Admittedly, copies of application for allotment of shares were also provided to the Assessing Officer. Since the applicant companies were duly incorporated, were issued PAN cards and had bank accounts from which money was transferred to the assessee by way of account payee cheques, they could not be said to be non-existent, even if they, after submitting the share applications had changed their addresses or had stopped functioning. Therefore, the Commissioner (Appeals) and the Tribunal were justified in holding that the genuineness of the transactions had been duly established by the assessee. xi. Decision of Hon ble Delhi High Court in the case of CIT vs. Value Capital Services Pvt. Ltd., (2008) 307 ITR 334 (Del.) (HC), in which it was held as under : Dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss money paid towards purchase of agricultural land. The Assessing Officer has treated this amount as undisclosed income of the assessee. Apart from ground No. 2, challenging the above addition, the assessee has also taken an alternate ground No.4 agitating that the ld. Authorities below are not justified in not giving credit of surplus amount of surrendered income of ₹ 29,58,792/- against addition of ₹ 5,70,000/- made on account of excess money paid towards purchase of agriculture land. The ld. AR of the assessee has laid much emphasis on the alternate ground of appeal. The ld. DR, on the other hand, has reiterated the findings reached by ld. Authorities below. 12. We have heard the submissions of both the parties and have gone through the entire material available on record. Admittedly, the assessee surrendered a sum of ₹ 7,50,00,000/- on account of peak investment of diaries seized during the course of search, which stood accepted by the Revenue authorities as business income of assessee. It is also an admitted fact that the actual peak amount worked out to ₹ 7,20,41,208/-. Therefore, the surplus amount of ₹ 29,58,792/-, admittedly, being the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) has acted arbitrarily and on presumptions basis, contrary to principles of natural justice and provision of law as such the action and findings based thereon stands vitiated and order is bad in law. 2. That the Ld Commissioner of Income Tax (Appeals) has erred in not holding that notice u/s. 153A issued by Ld AO is misconceived and illegal being without jurisdiction, contrary to facts and provision of law and hence the assessment based thereon must be quashed as erroneous and void. 3. On the facts and circumstances of the case Ld. Commissioner of Income Tax (Appeal) is not justified in confirming addition of ₹ 35,00,000/- U/s 68 on account of share capital subscribed by one company incorporated under the companies act made by Ld AO which is based on surmises and conjectures, against principles of natural justice and contrary to facts and provision of law and hence the addition so made by Ld. A.O. and confirmed by CIT(A) needs to be deleted. 4. That the Ld Commissioner of Income Tax (Appeals) has erred in not holding that the Ld. AO is not justified in disturbing the completed assessment U/s 143(1) of the Income Tax Act'1961 in the absence of any seized ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
