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TMI Blog2022 (2) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... this case. Hence, the AO s act of drawing adverse inference in this regard is not at all sustainable. Furthermore, the adverse inference on account of share premium is also not sustainable as necessary amendment by way of insertion of section 56(2)(viib) of the Act was also brought into statute books from AY 2013-14 and the same is not at all applicable for the current assessment year. The assessee has discharged its onus. There was no requirement of proving the source of source in the impugned assessment year. Also the necessary mandate of the Act for addition of share premium was also not there in the said assessment year. In this view of the matter on the touchstone of decisions VEEDHATA TOWER PVT. LTD. [ 2018 (4) TMI 1004 - BOMBAY HIGH COURT] AND M/S. ORCHID INDUSTRIES PVT. LTD. [ 2017 (7) TMI 613 - BOMBAY HIGH COURT] , we do not find any infirmity in the well reasoned order of ld.CIT(A) on the merits of the case. Hence, we uphold his order in this regard and revenue s appeal stands dismissed. - ITA No.7871/Mum/2019 And Cross Objection No.113/Mum/2021 ITA No.7871/Mum/2009 - - - Dated:- 17-2-2022 - Shri Shamim Yahya, AM And Shri Amarjit Singh, JM For the Assessee : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirmation in respect of M/s. Great Eastern Infrastructure Corporation Pvt. Ltd. (iii) Valuation Report (iv) Copy of bank statement for the period from 01.03.2007 to 30.03.2007 of M/s. Great Eastern Infrastructure Corporation Pvt. Ltd. the details of which are reproduced as under. The assessee failed to furnish share application form and justification for the premium charged vis-a-vis the intrinsic value of the shares. The assessee also failed to prove capacity and creditworthiness of investors Notice u/s 133(6) of the Act Is issued vide letter dated 07.03.2016 to the investor M/s. Great Eastern Infrastructure Corporation Pvt. Ltd. but no response has been received. From the above, it was evident that the assessee company has miserably failed to establish the genmnengs^of tht* transaction and its true nature. Considering the parameters as discussed supra, it is established beyond doubts that the assessee company could not substantiate its claim of having received the said sums of money from the stated persons towards share application/share capital and share premium. The primary onus is on the assessee to prove that the sums found credited in its books are truly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the turnover and its subsequent increase in projected turnover. When the basis of valuation itself is doubtful then how can a reliance be placed on the valuation report. (iv) The actual user of the funds so raised is other companies. The fund raised by the assessee company did not remaine in circulation of assessee's business and it has been merely routed through its books to the beneficial enjoyment of persons other than the assessee company. In view of the above, it is held that the sum of ₹ 1,50,00,000/- introduced in the books of the assessee company as share application money; share capital and share premium is hereby held as unexplained and unsubstantiated as to the genuineness/nature thereof and is brought to tax accordingly u/s. 68 of the Act. 7. Against the above order , assessee appealed before the ld.CIT(A) challenging both the reopening as well as merits of the addition. The ld.CIT(A) dismissed the challenge to reopening by concluding as under:- The action u/s.147 is possible despite complete disclosure of material facts if there is any escapement of assessment proceedings vide Praful chunilal Patel, Vasant Chunilal Patel vs. ACIT (1999) 236 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly pointed out by the AR the proviso placed u/s. 68 requiring to prove the source of source is applicable from AY 2013-14. 9. Thereafter, ld.CIT(A) referred to various case laws including that from Hon ble Bombay High Court in the case of CIT vs Green Infra Ltd. [2013] 145 ITD 240/38 taxmann.com 23 and quoted there from. Referring to the case laws, he held as under:- Therefore respectfully following the above decisions of jurisdictional High Court and the Hon ble ITAT Mumbai, it is held that the legislature does not envisage any sort of valuation for the purpose of section 68 of the Act and the addition made because of premium received for instant AY 2008-09 is incorrect under the law and liable to be deleted. 10. Thereafter, he also held that share capital transactions are transactions of capital account and he referred to Hon ble Bombay High Court in the case of Vodafone India Pvt.Ltd. vs UOI 368 ITR 1. Thereafter, he referred to ITAT decision in the case of ITO vs Anant Shelters Pvt.Ltd. (2012) 20 taxmann.com 153 Thereafter, he observed as under:- It is seen that during the course of assessment proceedings, the following documents were filed by the assessee befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he referred to Hon ble Supreme Court in the case of CIT vs Lovely Exports 6 DTR 308 and Hon ble Bombay High court in the case of CIT vs Creative World Telefilms Ltd. 333 ITR 100 and Hon ble Bombay High court in the case of CIT vs. Gangandeep Infrastructure Pvt.Ltd.394 ITR 680. Referring to the case laws he has held as under:- In view the above factual and legal position when details with supporting documents for the share application money and the investor are provide during the course of assessment proceedings and the same have been brought on record, the amount received as share capital and share premium cannot be treated as unexplained cash credit in the hands of receiver of such share application money. Respectfully following the order of the jurisdictional ITAT and High Court which are squarely applicable to the facts of the appellant s case, the addition of ₹ 1,50,00,000 made by the AO u/s. 68 is directed to be deleted. Ground No.2 is accordingly allowed. 12. Against the above order, revenue has filed appeal on merits of the case and assessee has filed cross objection challenging the ld.CIT(A) decision on the validity of reopening. 13. We have heard both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries Pvt.Ltd. in ITA No. 1433 of 2014has held as under: 5] The Assessing Officer added ₹ 95 lakhs as income under Section 68 of the Income Tax Act only on the ground that the parties to whom the share certificates were issued and who had paid the share money had not appeared before the Assessing Officer and the summons could not be served on the addresses given as they were not traced and in respect of some of the parties who had appeared, it was observed that just before issuance of cheques, the amount was deposited in their account. 6] The Tribunal has considered that the Assessee has produced on record the documents to establish the genuineness of the party such as PAN of all the creditors along with the confirmation, their bank statements showing payment of share application money. It was also observed by the Tribunal that the Assessee has also produced the entire record regarding issuance of shares i.e. allotment of shares to these parties, their share application forms, allotment letters and share certificates, so also the books of account. The balance sheet and profit and loss account of these persons discloses that these persons had sufficient funds in their ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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