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TMI Blog2021 (9) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee was selected for scrutiny. Necessary notices u/s 143 (2) was issued. 3. During the course of assessment proceedings, the learned AO examined the audited financial statement and the tax audit report filed by the assessee and noted that assessee has received Rs. 206,619,800/- as share capital and share premium. The assessee was asked to furnish the details of the same. The assessee furnished such detail stating the name, address, the amount received as application money, the income tax returns of the investors, annual reports, the confirmation of the parties, their bank statements. 4. Though the learned assessing officer made the addition of the all the share capital of Rs. 226,619,800/- u/s 68 of the act, the learned CIT - A deleted the total addition, the learned assessing officer is only aggrieved by the deletion of the addition to the extent of Rs. 94,000,000/-. Therefore, only the facts related to the addition in this appeal are discussed. 5. The addition of Rs. 9.40 crores comprising of Rs. 8,409,800 received from 5 farmers and the balance sum received from the two directors of the assessee company. 6. Learned AO noted that there are certain farmers (5) who have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore the dispute before us is now only with respect to 9.40 crores added by the learned assessing officer u/s 68 of the income tax act which is deleted by the learned CIT - A. 8. The learned departmental representative supported the order of the learned assessing officer and stated that with respect to the addition of Rs. 9.40 crores received during the year under consideration. He submitted that the assessee has received a sum of Rs. 85,590,200 comprising of Rs. 4,01,00,000 received from Mr. Gaurav Asseem and Rs. 4, 54,90,200 received from Mr. Kalwa Singh. He submitted that both of them are the directors of the assessee company. He further submitted that the balance amount of Rs. 8,409,800 was received from five farmers. He submitted that this is the amount, which is in dispute in this appeal. He submitted that the learned assessing officer has given detailed reason for making the addition. He referred to page number 8 of the assessment order wherein starting from serial number 38 - 42 the reference of all these farmers are given. He submitted that that the details submitted by the assessee with respect to the mandi bills and sugar mill statements do not show creditworthiness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake investment in the assessee company and further the genuineness of the amount invested. He submitted that assessee has also produced the various bank accounts of the farmers, which has been examined by the learned assessing officer, and such bank accounts adequately shows the amount available with those farmers in their bank accounts. He submitted that there is no allegation that there is any cash deposited in the account of the farmers and that money has been invested by the farmers in the assessee company. He further submitted that the share application money paid by them is duly reflected in the bank account of those farmer and the source is either from opening balance outstanding them in their name in the bank account or the amount received by them from sale of agricultural produce. It is not the case of the revenue that the land holding of these farmers do not substantially justify the amount invested by the farmers in the assessee company. He also submitted that with respect to each of the farmers the complete evidence with regard to the sale of agricultural produce and account maintained by them with cooperative can development union Ltd has also been filed. He referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age number 93 of the paper book and stated that the agricultural investors are willing to appear before the learned assessing officer even in a shorter noticed for providing their details with respect to the genuineness of the investment. The assessee also requested to summon them selectively or to call for all the investor and assessee is ready to produce them. The learned assessing officer did not act upon these request and merely made an addition on non-cogent reasons. He referred to page number 15 - 20 of the order of the learned CIT - A wherein submission has been given with respect to each of the farmers. He submitted that these information has not been controverted by the learned assessing officer, no further inquiries have been made, the request of the assessee for production of those farmers was also made before the learned assessing officer which was not acted upon but the learned AO has made the addition on flimsy ground. Therefore, he submitted that the assessee has completely discharged its onus cast upon it for proving the identity, creditworthiness, and genuineness of these cash credits. 11. With respect to the sale issued to the directors of the company for which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment of the preceding year has been reopened by the learned assessing officer nor has this ground been contested before us. Therefore the deletion of the addition to the extent of Rs. 112,619,800 u/s 68 made by the learned assessing officer has been deleted by the learned CIT - A has now reached finality. Thus the issue before is with the respect to the balance addition of Rs. 9.40 crores comprising of the two parts, (1) a sum of Rs. 8,409,800 received from 5 farmers and (2) the balance sum received from the two directors of the company against which the share capital has been issued. 14. With respect to the first portion of the addition with respect to the 5 parties stated in serial number 38 to 42, which are farmers who have invested the sum, ranging from Rs. 10 lakhs to Rs. 25 lakhs in the share capital of the assessee company. The assessee has submitted the details of these farmers with respect to their identity, which is not in doubt. The only doubt is with respect to the creditworthiness of these farmers. To prove the creditworthiness, the assessee has submitted copies of the bank account of the farmers, copy of the land holding, details of the agricultural produce, det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g officer has not accepted the request of the assessee for examination of these farmers. Therefore, the reasons of the learned assessing officer for making of addition u/s 68 of the income tax act with respect to these farmers merely remains an allegation which has not been proved. Contrary to that, the assessee has produced all the details before the assessing officer, which remain uncontroverted. With respect to these five farmers where the addition involved is only Rs. 8,409,800/- the learned CIT - A has dealt with this in paragraph number 3.3 of his order as Under:- "3.3 the counsel filed the various details to establish the identity and creditworthiness of the subscribers in the form of confirmation, copies of land holding and evidences of sale of crops et cetera. It was submitted that all the five subscribers are men of means an agriculturist. The counsel vide letter dated 16/3/2015 submitted to the assessing officer that the agriculturist are ready to attend the proceedings and if needed they may be summoned u/s 131 of the act for further verification. The assessee vide letter dated 18/3/2015 further filed the evidences regarding the means of the subscribers and the requis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed assessing officer for making the above addition. With respect to both these directors assessee has produced the confirmation of the parties, their identification details in the form of their permanent account number, their balance sheets and confirmation to show that the directors have made the investment in the above companies. In the balance sheet of Mr. Gaurav Aseem share investment in the above company are shown at Rs. 53,166,000 as on 31st of March 2012. It is also important to that for assessment year 13 - 14 the identical addition with respect to the above director was made to the extent of Rs. 2.25 crores further invested in this company for the year ended on 31st of March 2013 which were also added by the learned assessing officer, which was deleted by the learned CIT appeal and same has not been appealed further by the learned AO before the ITAT. In the remand report for assessment year 2013- 14, the learned assessing officer has verified the correctness of introduction of money by the directors. The learned assessing officer further carried out the investigation and after that the learned AO has accepted that the amount invested by the directors of the company that it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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