9911796707
TMI Blog2021 (9) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961 ; in short the Act , on the following grounds of appeal: 1. The order of ld. CIT(A) is against the law, weight of evidence and probabilities of case. 2. The ld. CIT(A) erred in confirming an addition of ₹ 7,30,00,000/- made u/s 68 of the IT Act. 3. The ld. CIT(A) ought to have appreciated that the assessee allotted the shares to the said companies and also filed Form No. 2 with the Registrar of Companies. 4. The ld. CIT(A) ought to have appreciated that the assessee provided all the details of allotment of shares on receipt of money and the transactions have taken place through banking channels and therefore erred in confirming the addition of ₹ 7,30,00,000/-. 5. The ld. CIT(A) ought to have appreciated that the AO failed to provide the information received form DCIT, Central Circle 3(2), Mumbai, therefore violated principles of natural justice and therefore, the addition of ₹ 7,30,00,000/- is not justified 6. The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary. 2. Briefly the facts of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of revenue authorities. In the case of NRA Iron and Steel (P) Ltd. (supra), the Hon ble Supreme Court has held as under: 8. We have heard the Ld. Counsel for the Revenue, and examined the material on record. 8.1. The issue which arises for determination is whether the Respondent / Assessee had discharged the primary onus to establish the genuineness of the transaction required under Section 68 of the said Act. Section 68 of the I.T. Act (prior to the Finance Act, 2012) read as follows: 68. Cash credits- Where any sum is found credited in the book of an Assessee maintained for any previous year, and the Assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the Assessee of that previous year (emphasis supplied) The use of the words any sum found credited in the books in Section 68 of the Act indicates that the section is widely worded, and includes investments made by the introduction of share capital or share premium. 8.2. As per settled law, the initial onus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Other7 wherein the Court that :333 ITR 119 (Delhi)(2011) [1985] 23 TTJ (Cal.) (2012) 206 Taxaman 254 (Delhi) 38. Even in that instant case, it is projected by the Revenue that the Directorate of Income Tax (Investigation) had purportedly found such a racket of floating bogus companies with sole purpose of lending entries. But, it is unfortunate that all this exercise if going in vain as few more steps which should have been taken by the Revenue in order to find out causal connection between the case deposited in the bank accounts of the applicant banks and the assessee were not taken. It is necessary to link the assessee with the source when that link is missing, it is difficult to fasten the assessee with such a liability. 9. The Judgments cited hold that the Assessing Officer ought to conduct an independent enquiry to verify the genuineness of the credit entries. In the present case, the Assessing Officer made an independent and detailed enquiry, including survey of the so- called investor companies from Mumbai, Kolkata and Guwahati to verify the credit-worthiness of the parties, the source of funds invested, and the genuineness of the transactions. The fie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the transactions. The initial onus of proof lies on the assessee. This Court in Roshan Di Hatti v. CIT11, held that if the assessee fails to discharge the onus by producing cogent evidence and explanation, the AO would be justified in making the additions back into the income of the assessee. 410 ITR 379 (1992) 2 SCC 378 v. The Guwahati High Court in Nemi Chand Kothari v. CIT 12 held that merely because a transaction takes place by cheque is not sufficient to discharge the burden. The assessee has to prove the identity of the creditors and genuineness of the transaction. : It cannot be said that a transaction, which takes place by way of cheque, is invariably sacrosanct. Once the assessee has proved the identity of his creditors, the genuineness of the transactions which he had with his creditors, and the creditworthiness of his creditors vis-a-vis the transactions which he had with the creditors, his burden stands discharged and the burden then shifts to the revenue to show that though covered by cheques, the amounts in question, actually belonged to, or was owned by the assessee himself (emphasis supplied) vi. In a recent judgment the Delhi High Court13 held that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. and Eternity Multi Trade Pvt. Ltd. at Mumbai, were found to be non-existent at the address given, and the premises was owned by some other person. b. The companies at Kolkatta did not appear before the A.O., nor did they produce their bank statements to substantiate the source of the funds from which the alleged investments were made. c. The two companies at Guwahati viz. Ispat Sheet Ltd. and Novelty Traders Ltd., were found to be non- existent at the address provided. The genuineness of the transaction was found to be completely doubtful. ii. The enquiries revealed that the investor companies had filed returns for a negligible taxable income, which would show that the investors did not have the financial capacity to invest funds ranging between ₹ 90,00,000 to ₹ 95,00,000 in the Assessment Year 2009-10, for purchase of shares at such a high premium. For example: Neha Cassetes Pvt. Ltd. - Kolkatta had disclosed a taxable income of ₹ 9,744/- for A.Y. 2009-10, but had purchased Shares worth Rs, 90,00,000 in the Assessee Company. Similarly Warner Multimedia Ltd. Kolkatta filed a NIL return, but had purchased Shares worth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, clearly the Assessee Company - Respondent failed to discharge the onus required under Section 68 of the Act, the Assessing Officer was justified in adding back the amounts to the Assessee s income. 16. The Appeal filed by the Appellant Revenue is allowed. In the aforesaid facts and circumstances, and the law laid down above, the judgment of the High Court, the ITAT, and the CIT are hereby set-aside. The Order passed by the AO is restored. Pending applications, if any are disposed of. Ordered accordingly. 7.1 The above case of Hon ble Supreme Court aptly applies to the case of the assessee in hand. Even before us also, the assessee failed to fulfill the conditions laid down u/s 68 of the Act by way of documentary evidence and we do not find any merit in the submissions made before us. Therefore, we do not find any infirmity in the order of the CIT(A), who followed the judgment of the Hon ble Supreme Court quoted supra to confirm the order of the AO and accordingly, upholding the order of the CIT(A), we dismiss the grounds raised by the assessee on this issue. 8. In the result, appeal of the assessee is dismissed. Pronounced in the open cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
