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TMI Blog2022 (5) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in the case of P. R.Ganpathy [ 2012 (9) TMI 482 - SUPREME COURT] has observed that the burden to show that the amount received by purported gifts from the donors was a gift in the legal sense is upon the assessee. Also in the case of Roshan Di. Hatti Vs. CIT [ 1977 (3) TMI 3 - SUPREME COURT] has held that the law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him. Where the nature and source of a receipt, whether it be of money or of other property, cannot be satisfactorily explained by the assessee, it is open to the revenue to hold that it is the income of the assessee and no further burden lies on the revenue to show that income is from any particular source. - Decided against assessee. - ITA No. 1173/PUN/2016 - - - Dated:- 18-5-2022 - Shri Inturi Rama Rao, Accountant Member And Shri Partha Sarathi Chaudhury, Judicial Member For the Assessee : Shri Naresh Kumar For the Revenue : Shri Sardar Singh Meena ORDER PER PARTHA SARATHI CHAUDHURY, JM : This appeal preferred by the assessee emanates from the order of the ld.CIT(A)-1, Nashik dated 08-03-2016 for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining a bank account at the relevant time with Western Cooperative Bank Ltd. in Andheri (E). Secondly, the CIT(A) also observed that the shareholders of the assessee company did not contribute any amount which was entirely loaned to them by M/s. Portal India and the source of funds stood proved, no addition was warranted u/s.68 of the Act. In this background, when the matter travelled upto the Tribunal, it was observed and held as follows : 9. We have examined the findings of the CIT(A) with respect to three ingredients which are required to be discharged by the assessee when faced with an inquiry u/s.68 of the Act. The said onus involves not only proving the Identity and capacity of the source creditors but also genuineness of the transaction. In the present case the Assessing Officer had noted that the assessee has claimed to have purchased a software portal for Rs.9,30,00,000/- from M/s. Portal India in terms of the Memorandum of understanding; in turn, the said sum of Rs.9,30,00,000/- was routed as share capital in the assessee company albeit not in the name of M/s. Portal India but in the names of ten share holders. Notably, the purchase of the software portal from M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was found to be ingenuine. For all the above reasons, the Assessing Officer invoked section 68 of the Act and found the credit of Rs 9.30 crores as unexplained within the meaning of section 68 of the Act. 8. The CIT(A) deleted the addition by noticing that the share capital of Rs.9.30 crores was the amount transferred from the bank account of M/s. Portal India to the share holders account and from bank account of the share transaction with M/s Portal India. On the aspect of genuineness of the transaction, there is no finding by the CIT(A), and quite clearly, the same has not been addressed by assessee also before the CIT(A). Therefore, under these circumstances, in our considered opinion the CIT(A) erred in straightaway deleting the addition without being satisfied about genuineness of the transaction. Therefore, considering the entirety of the facts and circumstances of the case, we deem it fit and proper that order of the CIT(A) be set aside and the matter be examined afresh so as to establish that all ingredients required for the purpose of Section 68 of the Act are fulfilled or not. Accordingly, we set aside the order of the CIT(A) and restore the matter back to his file t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate, New Link Road, Andheri West, Mumbai 400053, and having PAN AAABH2925P. Further all the share capital money of Rs. 9,30,00,000/- was in turn advanced to M/s Portal India by the assessee company for the establishment of portal or website. All of these transaction have happened on a single date i.e. 19/04/2000 in the same bank i.e. western Co-op. Bank Ltd. Ahdheri (E) Branch. In response to summons issued by AO to the ten share holders only one shareholder i.e. Yeshwant R. Gujar appeared who denied having any transaction with the company or taking any loan from Portal India as evidenced from para 2 of the assessment order. Further on verification the PAN submitted by appellant of Portal India to whom the money was advanced was found to be bogus. The AO inquired from the assessing officer of M/s. Portal India and found that no company of such name exists. The appellant did not produce Mr Dharma Singh owner of portal India either at the time of assessment proceedings nor before me so that the veracity or existence of Portal India could be ascertained. Further , the AO after detailed examination has observed that neither the creditworthiness of shareholders is present to advance t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditworthiness of the creditor. In view of the fact on record in the instant case, the appellant is neither able to establish the identity of the creditor, nor the assessee was able to prove the creditworthiness of the creditor or the genuineness of transaction. Hence, the assessee has not been able to discharge the initial onus as he has not been able to establish the identity and creditworthiness of the share applicants and the genuineness of the transaction. The surrounding circumstances and inquiries made by the Assessing Officer are significant evidences to hold that the addition made is correct. Therefore, the AO had rightly added the sum of Rs. 9.03 crores to the appellant s income and held it to be subject to tax. The addition of Rs. 9.03 crores is upheld. 5. We have heard the rival contentions, considered the facts and circumstances in this case. We find that in the first round relief was provided to the assessee by the First Appellate Authority which was overturned by the Tribunal vide order dated 25-05-2012 in ITA No.216/PUN/2010 for the A.Y. 2001-02 and the matter was remanded back to the file of ld. CIT(A) to examine the three essential elements of section 68 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Whilst the acquisition of the shares of Galaxy Commercial was not doubted by the AO, what ultimately fell for his consideration was the sale consideration. The AO's discussion in paragraph 3 of his order is significant in this regard; both the purchasers did not respond to notices issued by the income authorities. Furthermore, the AO's enquiry reveal that these purchasers had insubstantial means and could not reasonably be said to possess the means to make the investments that they did, in purchasing the assessee's shares for the amounts reported by it. Besides, as to whether the transaction was genuine or not is a pure finding of fact which has concurrently been rendered against the assessee. 7. In the case of Riddhi Promoters Pvt. Ltd 232 Taxman 430 dated 27-03-2015, the Hon ble Delhi High Court held as under: It is not sufficient that the identity of the share applicant or the creditor should he established for the assessee to discharge the initial onus, which is upon the assessee. Under the requirement of Section 68, the assessee has to further satisfy the Revenue as to the genuineness of the transaction and the creditworthiness of the share applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material available on record. Application of mind is the sine qua non for forming the opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Hon ble Court further observed as under : 25 The doubtful nature of the transaction and the manner in which the sums were found credited in the books of accounts maintained by the assessee have been duly taken into consideration by the authorities below. The transactions though apparent were held to be not real one. May be the money came by way of bank cheques and paid through the process of banking transaction but that itself is of no consequence. 10. We find the Hon ble Supreme Court in the case of P. R.Ganpathy 210 Taxman 572 has observed that the burden to show that the amount received by purported gifts from the donors was a gift in the legal sense is upon the assessee. 11. We find also the Hon ble Supreme Court in the case of Roshan Di. Hatti Vs. CIT, 107 ITR 938 has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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