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TMI Blog2019 (3) TMI 1960X X X X Extracts X X X X X X X X Extracts X X X X ..... ven produce the directors of the companies. We agree therefore with the Ld.CIT(A) that the share premiums could not be said to be ingenuine merely because the directors of the companies were not produced for examination. Revenue challenge to the deletion of the addition on the ground that the assessee did not discharge its onus during assessment proceedings and adequate opportunity was not given to the AO to complete his inquiry vis a vis the investor companies and further that the CIT(A) admitted the additional evidences without following the procedure laid down in Rule 46A of the Income Tax Rules,1962 for the same is not acceptable since as held above by us the assessee had duly discharged its onus of proving the genuineness of the transaction and the A.O. had been given sufficient opportunity to conduct all inquiries vis a vis the said investors in remand proceedings. Further we find that the CIT(A) had noted the fact that though the assessee had sought time to produce the investors, the AO without giving any further opportunity finalized the assessment. In this backdrop the CIT(A) admitted the evidences filed by the assessee collected from the investors and forwarded them to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Apporva Leasing Fin. and Investment Co. Ltd, 104, Single Storey, Ramesh Nagar, New Delhi. 1120000/- 8 M/s Avail Financial Services Pvt. Ltd, 555, Double Storey Market, New Rajinder Nagar, New Delhi. 980000/- 9 M/s Solomon Holdings Pvt. Ltd, Room No. 401, 3198/15, 4m Floor, Gali No.1, Sangatrashan, Paharganj, New Delhi. 560000/- Total 93,80,000/- 4. The A.O. called for certain information from these parties u/s 133(6) of the Act ,i.e PAN Number, proof of filing return of income for the impugned year, computation of income, copy of bank statement from where cheques were issued and the source and mode of receipt of funds for investing in the impugned share premium alongwith copy of the relevant ledger account. In the case of four parties at S.Nos.1, 2, 3 and 4, in the table above, the notices were returned back undelivered since the parties could not be traced/found at the said addresses. In case of three parties at Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said documents showed that the investors company had sufficient capitals and reserves that investment had been made through bank accounts and copy of their income tax returns had also been submitted. In view of the same, the Ld.CIT(A) held that the identity, creditworthiness and genuineness of the transaction was not in doubt. The Ld.CIT(A) further stated that the A.O. had disallowed the investment merely because the parties could not be produce. Thereafter referring to various decisions of the Hon'ble High Court the Ld.CIT(A) held that the assessee had fully discharged its onus to prove the genuine of the transaction and accordingly, deleted the addition made. The relevant finding of the Ld.CIT(A) at para 6.3 of his order is as under: 6.3 I have considered the submissions made and also perused the assessment records. It is noted from the submissions assessment record that the appellant during the course of assessment proceeding has duly submitted the copies of resolution of the Board of Company regarding allotment of shares, application from the respective subscriber companies for allotment of shares. The PAN No., copy of lTR with acknowledgement, list of Directors with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich it has no control. Further, vide order sheet entry dated 25.03.2013, it was submitted by the counsel of the appellant that it is not possible to produce these parties on 25.03.2013, as the concerned persons are out of station on account of long week and an occasion of Holi and Good Friday holidays. However, the A.O. completed the assessment on the same date. The appellant also submitted that there was a change of address in some cases and the new addresses were duly filed in the information letters now. All such documents were forward to A.O. which is not controverted. Further, as per details submitted, the shares capital of the investor companies and reserves and surplus are as under:- M/s Vishal Paper Industries Pvt. Ltd., Patiala Assessment Year 2010-11 Details of Additions in Share Capital Account Enclousers Thereof S. No. Name of the Share Holder Share Capital of The Company Reserve Surplus 1. Aasheesh Capital Services Pvt. Ltd. 123.355.000.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore than one company being registered at the same address. Merely because the applicants did not respond to the notices sent to them, the A.O. was not justified in adding the amount of share application money to the income of the assessee. In the case of CIT vs. Dwarkadhish Investment (P)Ltd. 330 ITR 298 (Del) the assessee company received share application money. The Hon'ble High Court held that the initial burden of proof lies on the assessee yet once he proves the identity of the creditor/share applicant by either furnishing their PAN or Income tax assessment number and shows the genuineness of transactions by showing money in his books either by account payee cheques or by draft or by in other mode, these onus of proof would shift to the revenue. Just because the creditors/share applicants could not be found at the address given, it could not give the revenue the right the invoke section 68. Moreover it is a settled law that the assessee need not prove the source of source. In this case the tribunal has confirmed the order of CIT (A) deleting impugned addition and held that the assessee has been able to prove the identity of share applicants and the share applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies did not comply with the notice issued to them, the balance two companies submitted incomplete information and the assessee also could not produce the companies before the AO. 2. In the facts and circumstances of the case, the Ld. CIT(A) has erred in accepting assessee's version about genuineness of investors without giving an opportunity to the AO to call the companies so as to complete the inquiry he had initiated in respect of companies, especially since four companies were not found at their given addresses, three companies did not respond to the inquiry notice and the balance two companies furnished incomplete information. 3. In the facts and circumstances of the case, the Ld. CIT(A) has erred in relying on fresh information letters and changed addresses admittedly not supplied by assessee to the AO during the assessment proceedings, without admitting the fresh addresses and information letters as fresh evidence by following the procedure laid down under Rule 46A and without giving any opportunity to the AO to examine such evidence, only on the ground that the information forwarded to the AO remained uncontroverted, without appreciating the fact that withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon him. Further ,we find that the CIT(A) has noted that the information sought for by the A.O. by making his own enquiry u/s 133(6) of the Act from the said investors was also collected by the assessee from the said investors and provided during appellate proceedings which was confronted to the A.O. who did not find any infirmity in the same. This fact has also remained uncontroverted before us. Thus it stands that the concerned parties had also independently confirmed the transactions. The CIT(A) ,we find also took note of the financial position of the investor companies and found that they had sufficient capital and reserve to make the investment. Ld.DR has been unable to controvert this fact also. The creditworthiness of the investor companies thus stands sufficiently established. Moreover the addition in the impugned case is only of the share premium received, and we agree with the Ld.CIT(A) that having accepted the share capital received from the same investors, there was no reason to doubt the premium thereon . 10. In view of the above, we have no hesitation in agreeing with the Ld.CIT(A) that the genuineness of the transaction stood established and we do not see any rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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