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TMI Blog2021 (8) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies did not appear in person before him in response to the summons issued u/s 131 of the Act to them, eventhough the relevant details called for in the summons, were duly provided by them. Only this fact of non-appearance of those directors of investor companies in person, had drawn the ld AO to treat the receipt of share application monies as accommodation entries and thereby making addition u/s 68 in the hands of the assessee company (i.e recipient company). In view of the aforesaid observations, these arguments of the ld DR would not come to the rescue of the revenue. Accordingly, we hold that the CIT-A had rightly deleted the addition made u/s 68 in the hands of the assessee company, on which we do not find any infirmity. The ground raised by the revenue is dismissed. - ITA No.2890/Mum/2017 - - - Dated:- 13-8-2021 - Shri Vikas Awasthy, Judicial Member And Shri M. Balaganesh, Accountant Member For the Assessee : Shri Tharian Oommen For the Revenue : Shri K. Gopal ORDER PER M. BALAGANESH (A.M): This appeal in ITA No.2890/Mum/2017 for A.Y.2012-13 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-9, Mumbai in appeal No.CIT(A)- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a sum of ₹ 2 croresin assessee company as against issuance of 250000 equity shares at face value of Re.1 and premium of ₹ 79 per share. 3.2. We find that the assessee in order to prove the three necessary ingredients of section 68 of the Act viz. identity of the shareholders, genuineness of transactions and creditworthiness of the shareholders, had submitted the following documents :- Aadhar Ventures India Ltd a) Audited Balance Sheet of Aadhar Ventures (I) Ltd for the year ended 31.3.2012 with previous figures reflected thereon. From the perusal of the Balance Sheet, we find that the said shareholder company is having sufficient share capital of ₹ 22.57 crores which is several times more than the amount invested in the assessee company. Apart from that, the said investor company had derived revenue from operations of ₹ 171.90 crores during the year ended 31.3.2012. All these facts collectively go to prove that the said investor company is having sufficient creditworthiness to make investment in share capital and premium in the assessee company to the extent of ₹ 10 lakhs. b) PAN details of Aadhar Ventures (I) Ltd clearly proving the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editworthiness of the investor company. Since the transactions were routed through the regular banking channels, it also proves the genuineness of the transactions. f) Audited Balance Sheet of Twenty First Century India Ltd for the year ended 31.3.2012 with previous figures reflected thereon. From the perusal of the Balance Sheet, we find that the said shareholder company is having sufficient share capital of ₹ 67.86 crores which is several times more than the amount invested in the assessee company. This proves the fact that the said investor company is having sufficient creditworthiness to make investment in share capital and premium in the assessee company to the extent of ₹ 2 crores. Speciality Papers Limited a) Copy of PAN Card proving the identity of the investor company. b) Copy of share application form filled by Twenty First Century India Ltd clearly proving the genuineness of the transaction that they had approached the assessee company in the routine manner. c) Copy of Board Resolution passed in the Board of Directors meeting of Twenty First Century India Ltd for making investment in the shares of assessee company herein. d) Copy of ackn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Shirish C Shah recorded under section 132(4) of the Act during the course of search operation of Shri Shirish C Shah. 3.4. We find that the ld CITA after considering the documentary evidences and submissions filed by the assessee and also considering the facts and circumstances of the case as detailed hereinabove , deleted the addition of ₹ 4,00,00,000/- made by the ld AO on account of share application money u/s 68 of the Act. We find that the ld CITA had categorically observed that the assessee had duly provided all the evidences and documents to substantiate the identity of the shareholders, creditworthiness of the shareholders and genuineness of the transactions. This finding of the ld CITA had not been controverted by the revenue before us. 3.5. We find that the notices issued u/s 133(6) and summons u/s 131 of the Act issued by the ld AO to the investor companies were duly served and responded directly before the ld AO by filing the necessary information and documents. No adverse inference was even sought to be drawn by the ld AO on the documentary evidences furnished either by the assessee or by the investor companies directly to him. Hence, merely because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears. More so, when the ld AO in order to investigate the transactions, had issued notices u/s 133(6) of the Act and summons u/s 131 of the Act, which were duly responded directly by the investor companies before him. In any case, no opportunity of cross examination of Shri Shirish C Shah was even provided to the assessee by the ld AO. It is the primary duty on the part of the ld AO to provide cross examination of parties, in case, if he desires to place reliance on any statement against the assessee, in order to controvert the same. Admittedly, Shri Shirish C Shah becomes the witness of the department as it is the ld AO who is placing reliance on the statement given by him during his search proceedings. 3.6. We find that the ld DR merely reiterated the observations of the ld AO that the directors of investor companies did not appear in person before him in response to the summons issued u/s 131 of the Act to them, eventhough the relevant details called for in the summons, were duly provided by them. Only this fact of non-appearance of those directors of investor companies in person, had drawn the ld AO to treat the receipt of share application monies as accommodation entries an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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