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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 ..... CIT A with respect to the above investment made by Mr. Gaurav Aseem, director of the company in the share capital of the company. With respect to another director Mr. Kalwa Singh share capital - this director was holding at the beginning of the year the share capital to the extent of ₹ 238,09,800. The share capital in the earlier years issued in the name of the same director has been accepted by the learned assessing officer. The assessee also provided with the permanent account number of the above director, confirmation and also the bank account of the director as well as the certificate from the bank with respect to the above share capital issued. Assessee has also produced the balance sheet of the director wherein as on 31st of March 2012 the shares in the name of the company amounting to ₹ 79,500,000 are outstanding. Therefore, it is apparent that assessee has discharged its onus of proving the identity, creditworthiness, and genuineness of the transactions. - Decided in favour of assessee. - ITA. No. 5247/Del/2017 - - - Dated:- 24-9-2021 - Shri Amit Shukla, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri I. P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a first-time entity in the share capital. If the promoters are known to those farmers then the farmer should have placed unsecured loan with them. He further examined the passbook of the farmers for the period subsequent to the year in question and found that none of them showed very substantial receipts in the subsequent period. He further noted that the farmers have shown the Mandi receipts and sugar mill statement for the sale of the product, which is according to him, is not commensurate in with the amount invested by them. He was of the view that a farmer though earn sales produce in Mandi and sugar mill, but has to reinvest substantial part of it back into farming activity for the next crop season and therefore it is not believed that how the farmers have invested in the share capital of a company. He noted that except one farmer Mr. Vijay Pal Singh, all other farmers investment in the form is more than their annual income. Therefore, the learned AO noted that the assessee has failed to submit any credible evidence to the satisfaction of the assessing officer with respect to the creditworthiness of such farmers share application and therefore the above sum is required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of Section 68 of the income tax act it is the duty of the assessee to prove the creditworthiness of these parties, which the assessee has failed and therefore the addition has been made. He further referred to paragraph number 3.2 of the order of the learned CIT appeal stating that the learned CIT appeal has not seen the basic argument of the learned assessing officer for making the addition that the mandi income and the sugar mill statement income of these parties are less than the amount invested by them in the above company. He therefore submitted that the learned CIT A has erred in deleting the above addition. 9. With respect to the next addition of ₹ 85,590,200 with respect to 2 directors of the assessee company, he submitted that the learned CIT A has deleted the addition without giving a cogent reason. 10. The learned authorised representative vehemently supported the order of the learned CIT A. He submitted that learned assessing officer has made the total addition of ₹ 206,619,800 u/s 68 of the income tax act however, the learned CIT A has noted that a sum of ₹ 112,619,800 was received in financial year 2010 11 relevant to asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber for the identification of the creditors. He further submitted the land records wherein the holding of the land is certified by the respective authority along with the details of agricultural produce cultivated therein. He further referred to the statement of urban co-operative Bank Ltd and of the depositor wherein a sum of ₹ 25 lakhs has deposited with the assessee. He submitted that there is no cash deposit in the bank account of the assessee and all the credits that have been received in that bank account is with respect to the sale of the agricultural produce. He further produced the statement of the cooperative can development union Ltd of the depositor wherein she is shown as an agriculturist and the details of the sale of the agricultural produce showing the weight as well as evidence of the agricultural produce sold. He further referred to the sales voucher of Krishi Utpadak Mandi Samiti. He therefore submitted that identical for all these depositors who are stated to be the farmers, the assessee has submitted the complete details with respect to the source of funds available with them also. He similarly referred to the paper book with respect to all 4 other farme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted the complete evidence with respect to the source of money which has been deposited by the assessee company. The assessee has also submitted the confirmation of these parties. The learned assessing officer has not raised any question with respect to these two parties however made the addition u/s 68 with respect to both the above sums. He further referred to the remand proceedings before the learned CIT A where the learned assessing officer has accepted the genuineness of the share application money received from these parties. For this proposition he relied on the order of the learned CIT A dated 28th of June 2018 passed in the case of the assessee for assessment year 2013 14 wherein para number 3.2 the name of the directors have been mentioned and in para number 3.4 3.9 the CIT appeal has accepted the genuineness of the share application money with these parties. He further referred to the order of the learned CIT appeal for that year. He further submitted that the revenue has not at all filed any appeal before the higher forum against the order of the learned CIT A for assessment year 2013 14 wherein the identity, creditworthiness and genuineness of these two di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation of the farmers. The learned assessing officer has taken a view that that the total receipt as per mandi bills and sugar mill statement submitted do not prove creditworthiness for the transaction of the investment made by them in the assessee company. His prima facie view is also tabulated separately wherein he states that the income of the farmers annually from sugar Mills as well as from Mandi is not exceeding the amount invested by the farmers in the assessee company. Example as for Mrs. Sulekha Singh, the learned AO stated that this farmer has invested a sum of ₹ 25 lakhs however her income for the year is only ₹ 1,563,069. Similarly, for Mr. Kishen pal Singh the income of the farmer is ₹ 780,449 for this year whereas his investment is ₹ 20 lakhs. For Mr. Vijay pal Singh, the annual income of this farmer is ₹ 1,257,677 whereas he has invested a sum of ₹ 10 lakhs. Mr. Kishen Pal Singh[ Birla] has annual income of ₹ 647,689 whereas his investment in the assessee company is ₹ 15 lakhs. Mr. Ranbir Singh has invested a sum of ₹ 4,009,800 whereas his annual income is only ₹ 466,208. We do not agree with this criteria l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted from the details filed during the appellate proceedings that the share capital is held by the respective subscribers till date. The assessing officer has not conducted any further enquiry/verification on the basis of evidences filed by the assessee during the assessment proceedings. There is no evidence on record to hold that the said capital is nothing but accommodation entries. The evidence filed show that the subscribers are having the requisite means to subscribe to the share capital and the money has not come into their account through the transfer entries. The details of the sale of crops have been filed before the assessing officer as well as during the appellate proceedings. 15. With respect to the addition of ₹ 8,409,800/ we also found that there is no infirmity in the order of the learned CIT A, the learned departmental representative also could not point out any infirmity. According to us, the assessee has discharged initial onus cast upon him to prove the identity of the depositors, creditworthiness, and the genuineness of the transaction. The learned assessing officer did not make any enquiry on the evidences filed by the assessee and further he has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the identity, creditworthiness, and genuineness. In view of this, we do not find any reason to upset the order of the learned CIT A with respect to the above investment made by Mr. Gaurav Aseem, director of the company in the share capital of the company. 17. With respect to another director Mr. Kalwa Singh share capital of ₹ 4 54,90,200 has been deposited with the assessee company. This director was holding at the beginning of the year the share capital to the extent of ₹ 238,09,800. The share capital in the earlier years issued in the name of the same director has been accepted by the learned assessing officer. The assessee also provided with the permanent account number of the above director, confirmation and also the bank account of the director as well as the certificate from the bank with respect to the above share capital issued. Assessee has also produced the balance sheet of the director wherein as on 31st of March 2012 the shares in the name of the company amounting to ₹ 79,500,000 are outstanding. Therefore, it is apparent that assessee has discharged its onus of proving the identity, creditworthiness, and genuineness of the transactions. Sim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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