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TMI Blog2021 (10) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 19.1.2015 and 5.3.2015. The party not only confirmed the said transaction but also explained the source of investment alongwith the set of documents as mentioned in the assessment order itself as well as in the impugned appellate order. The bank statement furnished by the said company reflected a transfer of ₹ 1,00,00,000/- of each on two occasions from its bank account with the Axis Bank to the bank account of the assessee on 10.8.2011. The company also stated that it assessed to tax income tax and duly reflected the said investment in the balance sheet. Ld. CIT (A) has also noticed that this company had sufficient source of funds in the form of share capital and reserves as per balance sheet. Apart from that, there is a categorical finding by the Ld. CIT(A) that there is no cash deposit in the bank account of share subscriber prior to issue of funds. Further, in so far as second discrepancy in the number of shares subscribed by M/s. Omexpo Enterprises Pvt. Ltd., the same was reconciled along with the share certificate filed before the Ld. CIT (A) which has been discussed in detail by him. Thus, in so far as assessee is concerned entire onus should discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owledgement of ITRs, Bank Account Statements of the applications was not sufficient to discharge the onus. 3. The Ld. CIT(A) has erred in accepting the creditworthiness and genuineness of transactions merely on the basis that transaction were through banking channel or by account payee instruments but it did not reflect their actual genuine business activities. 4. The Ld. CIT(A) did not notice that the share subscribers did not have its own profit making apparatus. It merely rotated money, which was coming through the bank accounts. The bank accounts did not reflect their creditworthiness of transaction. 5. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 2. The facts, in brief, are that Assessee Company is engaged in the business of buying and selling of wide range of footwear and in the year under consideration assessee has not started its business operations. The AO noted that assessee has raised the share capital of ₹ 13,52,625/- by issuing fresh 240525 equity shares out of which 30000 equity shares at par @₹ 10/- each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,50,000 ₹ 3075060/- No revenue from business activities only nominal income from other of ₹ 2359/- declared 2. Shri Girjesh Saraf 12,Dhudial Apartment, Madhuban Chowk Pitampura, Delhi 1,50,000 ₹ 1515200/- No business activities is being done. 3. Omexpo Enterprises Pvt. Ltd. 1401, Bazar sita Ram,Opp. LaL Darwaza Delhi - 110006. 2,00,00,000/- ₹ 2,02,565/- Sale of traded goods 5. It was further submitted by M/s Omexpo Enterprises Pvt. Ltd that they have applied for 2,00,000 equity shares of ₹ 10/- each at a premium of ₹ 90/- per share, whereas assessee company has submitted during the assessment proceedings that they have received and issued 210525 equity shares of ₹ 5/- paid up and share premium @ 90/- per share was charged. 6. Ld. AO deduced that no actual transaction of share capital has taken place and only the accommodation entry has been taken by the assessee, as assessee is claiming issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d its business operations hence no operational income has been declared except nominal receipt of interest on FDR. Details of Unsecured Loan/ Deposits taken during the year including Squared up loans. Details of various payments made to persons covered u/s 40A(2)(b) along with their ledger, PAN and other details. Details of Expenses Payable shown in Balance Sheet. Details of Shares Issued during the year. Details of investment and source of investment. Details of the shares allotted during the financial year under consideration along with Form 2. Balance sheet, Profit/Loss account and bank statement of M/s Omexpo Enterprises Pvt. Ltd. having Pan: AAACO8604R. Details of interest received on FDR 2. Notice u/s 133(6) 08.01.2015 As per record Copy of Account Statement of the Company for the A.Y. 12-13 (By M/s Omexpo Enterprises Pvt. Ltd.) Copy of Bank Statement from where funds have been given. (By M/s Omexpo Enterprises Pvt. Ltd.) Copy of 1TR, Audit Report with annexure, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, it is seen that the appellant has filed sufficient documents e.g. Permanent Account Number, bank statement copy, copy of IT Return of the company, statement from the MCA website showing that the company is live working company, etc. to establish the identity of the share applicant viz. M/s Omexpo Enterprises Pvt. Ltd. The share applicant had twice replied to notices issued by the Assessing Officer during the course of assessment proceedings. Copies of such replies dated 19.01.2015 and 05.03.2015 of M/s. Omexpo Enterprises Pvt. Ltd. before the Assessing Officer form part of the paperbook filed by the appellant before me. It is not understood that if the company had not existed, how it could file replies to notices issued by the A.O. The copies of the bank statements of the share subscriber and the appellant wherein the transactions are reflected (transfer of Rs.lcrore each two times from the bank account with Axis Bank of M/s. Omexpo Enterprises Pvt. Ltd. to the bank account of the appellant with Oriental Bank of Commerce on 10.08.2011) as well as the fact that it is assessed to income tax, establish the creditworthiness of the share subscriber. The income of M/s. Omexpo E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 5 / - each ₹ 90/- each ₹ 95,49,875/- 22.08.2011 80000 210526 to 290525 ₹ 10/- each ₹ 5 / - each ₹ 90/- each ₹ 76,00,000/- 4.2.4 On going through the assessment order, it is seen that the assessing officer has not been able to rebut or find any discrepancy in the documents submitted by the appellant. The appellant company has been able to prove its case and in case the appellant has failed to produce the Director of the shareholder company, as held by the jurisdictional High Court in the case cited above, the assessing officer cannot shift the burden on the appellant company. If the assessing officer had any doubt about the shareholder, nothing stopped him from taking appropriate action or proceeding against the shareholder or informing its Assessing Officer. It is a case where the appellant has been able to meet the requirements to justify its case. If the notices issued by the A.O. to the share subscriber company/its directors were not complied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR strongly relied upon the observation and the finding of the AO and submitted that though various documents may have been filed by the assessee however, the Director of the subscriber company could not be produced who could have been explained the entries in the bank statement and the source of funds. Thus, the share capital amount received from the said company remains unsubstantiated and has rightly been added u/s 68. 10. Ld. Counsel for the assessee strongly relied upon the order of the Ld. CITA() and further brought to our notice that after passing of the CIT(A) order, proceeding u/s 148 was initiated and same addition of ₹ 2,00,00,000/- have been again made by the AO and order passed u/s 143(3) /147 vide order dated 18.12.2019. On one hand, the revenue is pursuing appeal before this Tribunal on the deletion made by the Ld. CIT (A); and on the other hand, has also added the same income twice in the proceedings u/s148. Apart from that, he submitted that there is neither any adverse material on record nor the AO was able to find any discrepancy in the documents filed by the assessee and also by the subscriber company M/s. Omexpo Enterprises Pvt. Ltd. in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epancy in the number of shares subscribed by M/s. Omexpo Enterprises Pvt. Ltd., the same was reconciled along with the share certificate filed before the Ld. CIT (A) which has been discussed in detail by him. Thus, in so far as assessee is concerned entire onus should discharge and even in the inquiry conducted by the AO, no adverse material has been found as the party has provided all the necessary details to prove the genuineness of the transaction. In these circumstances, we do not find any reason as to why the transaction has been doubted by the AO without any adverse material found during the course of inquiry conducted by the AO. Now simply because Director of the subscriber company did not appear personally that does not mean that all other documents sent by the said company which are mostly statutory records as well as the income tax records can make the transaction fictitious. Thus, we do not find any infirmity in the finding and observation of the Ld. CIT(A) while deleting the said addition. 12. Apart from that, as brought on record by the Ld. Counsel, the AO subsequently based on certain information emanating from search in some other case on 29.3.2012, came to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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