9911796707
TMI Blog2022 (7) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... URT] . Therefore, we hold that there is a tangible material available with the assessing officer to form a reason to believe that the income of the assessee has escaped assessment. Accordingly, ground numbers 1 3 of the appeal are dismissed. Addition on account of share capital and share premium treating the same as an unexplained cash credit u/s 68 - the assessee could able to substantiate its case and satisfy three ingredients being identity, creditworthiness and genuineness of the transactions - As elaborately on the net worth of these companies and percentage of the investments are comparatively lower than total net worth of the investor companies. Accordingly, set aside the order of the CIT(A) and direct the assessing officer to delete the addition and allow this ground of appeal in favour of the assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... based out of Calcutta. One accommodation entry provider Mr. Rajesh Agrawal has received accommodation entries including the assessee for financial year 2008 - 09 to 2011 - 12. Mr. Agrawal admitted the undisclosed income of the group u/s 131 of the income tax act dated 9 October 2014. Subsequently, in response to notice u/s 148, assessee submitted a letter dated 4 April 2016 stating that return filed on 30 September 2009 May be treated as return in response to the notice. The reasons were asked for which were made available to the assessee. During the course of assessment proceedings, it was found that assessee has issued 41,000 equity shares of ₹ 10/- each at a premium of ₹ 90 per share is and accordingly, issued share capital of ₹ 41 lakhs. Details of issue of said capital is as Under; - Serial number name of the company to whom shares are allotted number of shares allotted share capital at the rate of ₹ 10/- share premium at the rate of ₹ 19/- per share total amount 1 Cherry tie-up private limited 5000 50,000/- 4,50,000/- 5,00,000/- 2 Deepa holding private limited 10,000 100,000/- 900,000/- 10,00,000/- 3 Hill view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the survey, Shri Agarwal submitted an affidavit of retraction on 8/11/2016. During the course of assessment proceedings, he confirmed that the transactions are genuine. Therefore, AO noted that such changing stand goes against the assessee. AO noted that the projects of the assessee is lying dead at the moment, there is no business receipt and still assessee got investors for making in the assessee company. AO stated that the shares were acquired through intermediaries and the investors are not available at the address mentioned by the assessee. AO further noted that the shares were issued to these companies however, no information that existing shareholders, whose copies of letters addressed to them for making an allotment was submitted, whether they have declined to invest. Therefore, the AO was of the view that that Calcutta-based investors have gifted the assessee money for no apparent reason and he noted that ₹ 41 lakhs is found to have been credited in the books of the assessee is taxed u/s 68 of the act. The assessment order u/s 143 (3) read with Section 147 of the act was passed on 28 December 2016 determining total taxable income at ₹ 4,746,816/- against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not reason to believe. For this proposition, he referred to the reasons recorded at page number 23 - 33 of the paper book. 09. On the merits of the addition, he referred to the page number 50 - 253 to show that complete information with respect to the identity, creditworthiness, and genuineness of the transactions are submitted. It was stated that despite availability of these overwhelming evidence, the learned assessing officer has not conducted any enquiry with respect to the depositors and further though the investors have not given information directly to the assessing officer u/s 133 (6) but has independently given information to the assessing officer. Merely non-reply of the notice u/s 133 (6) to the assessing officer directly, but furnishing all the information before the assessing officer by the investor through assessee, does not allow the AO to take any adverse view. 010. He submitted a paper book containing six and judicial precedents of the various benches of ITAT saying that a. identical party i.e. cherry tie-up of private limited and Deepa Holdings Pvt Ltd has been considered for assessment year 2009 - 10 in case of Moongipia development and infrastructure Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is their own money, despite restrictions letter on, the assumption of a bogus share capital issue remains intact. 013. With respect to the several judicial precedents relied upon by the learned authorised representative, he submitted that merely because in some other case or even in the case of the assessee, addition is deleted, that does not mean that the issue is covered in favour of the assessee with respect to that party. 014. We have carefully considered the rival contention and perused the orders of the lower authorities. We have also considered all the six judicial precedents relied upon by the learned authorised representative as well as the evidence furnished in the paper book with respect to the creditors/depositors/shareholders. 015. Ground number 1 - 3 is with respect to the reopening of the assessment. We find that assessee has filed its return of income, the same return of income has been accepted as it is without any scrutiny, later on the information is available in the form of statement during the course of survey of the directors of one of the group companies that the share capital obtained by the assessee is bogus, the learned assessing officer cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onically on 14.09.2010 with a total income of Rs. 2,53,121/- on 14.09.2010, and the return of income was processed u/s 143(1) of the Act. Subsequently, the A.O ITA No. 629/Mum/2019 Shri Shiv Shakti Enclave Pvt Ltd., Mumbai found certain information was not disclosed by the assessee and therefore the income has escaped the assessment. The A.O. after recording the reasons for reopening has issued notice u/s 148 of the Act. In response to the notice, the assessee has filed a letter dated 21.03.2017 to treat the return of income filed on 14.09.2010 as due compliance and requested for reasons recorded for reopening of assessment. The assessee has also filed a return of income on 11.09.2017 with a total income of Rs.2,53,121/-.Subsequently, the A.O. has issued notice u/s 143(2) and 142(1) of the Act. In compliance, the Ld. AR of the assessee appeared from time to time and furnished the details and reply to the queries and also submitted the documentary evidences in respect of the information. There was a search and seizure operations conducted in the Loutus/Kamadhenu/Green valley Group cases. and During the financial year 2009-10 the assessee company has received a sum of Rs.92,00,000/-a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in spite evidences/ financial statements of the investors are filed. Finally the A.O. concluded that the assessee company has filed the details/evidences but could not satisfied the test of identity, creditworthiness and genuineness of the transactions and relied on the judicial decisions and ITA No. 629/Mum/2019 Shri Shiv Shakti Enclave Pvt Ltd., Mumbai treated the amount credited in the books of account as income of the assessee under the provisions of Sec. 68 of the Act and assessed the total income of Rs94,53,120/- and passed the order u/s 143(3) r.w.s 147 of the Act dated 22.12.2017. 4. Aggrieved by the order, the assessee has filed an appeal with the CIT(A) and first challenged the reassessment proceedings. The CIT(A) dealt on the facts and obtained information on the report of search and seizure and the reasons recorded on the investments. The CIT(A) found that the assessment is valid and dismiss the grounds of appeal on the validity of re assessment. On the second disputed issue, the assessee has filed the elaborate submissions referred in the appellate order. The assessee has submitted the documents/evidences in respect of investors to substantiate that the shareholde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the amount received on the share application from five investors for allotment of shares during the financial year. We find that the assessee has submitted the substantial details before the assessing officer and appellate authority. The Ld.AR submitted that these 5 investor companies have made investment in the assessee company considering the future prospects. We find that no statement has been recorded in respect of these companies in the assessement proceedings. The A.O without going into the detail aspects has made addition and further we found that that the A.O has dealt elaborately on the statement of Shri Rajesh Agarwal who was connected to these shareholder companies and further Shri Rajesh Agarwal has retracted his statement and it was also brought to the knowledge of the A.O. The A.O has made addition based on surmises and ITA No. 629/Mum/2019 Shri Shiv Shakti Enclave Pvt Ltd., Mumbai conjunctions without proper verification and enquiry. During hearing proceedings, it was brought to the knowledge of the bench by the Ld.AR that these companies financial stability were already test checked and dealt by the Hon'ble Tribunal in the case of M/s. Bini Builders pvt Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 8 June, 2017 10. Umbrella Projects Pvt. Ltd. Vs. ITO 18(1) ITA. No. 5955/Del/2014 dated 23 Feb, 2018. Taking into account all the facts and circumstances mentioned above and also relying upon the decision of the Hon'ble ITAT in the sister concern case M/s. Binni Builder Pvt. Ltd. (supra) in which the issue has been decided on the basis of similar facts and circumstances, we set aside the finding of the CIT(A) on this and decided this issue in favour of the assessee against the revenue" 7.Similarly the Hon'ble Tribunal in the case of M/s.Bini Builders P. Ltd Vs DCIT in ITA No.630/Mum/2019 dated 05.05.2021 has dealt on the common facts, being identical and similar relating to these five investor companies at page 7 Para 6 and 7 of the order which is read as under: " 6. Upon careful consideration, as rightly pointed out by Ld. AR, the issue is squarely covered in assessee's favor by the earlier decision of coordinate bench of this Tribunal in assessee's own case for AYs 2011-12 & 2012-13, ITA Nos. 631 & 632/Mum/2019 common order dated 12/03/2020. The relevant findings of the bench were as under: - 7. We have carefully heard the arguments advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record. The genuineness of the transactions would stand proved by the fact that the transactions were duly supported by share application form, share certificates, copy of board resolution and by the fact that ultimately the shares were allotted to all these entities. The assessee has tabulated the net worth of all these entities in the following manner: - The perusal of net worth chart would reveal that all the investor entities had sufficient net worth to make stated investment in the assessee company. Upon perusal of all these documentary evidences, it could safely be concluded that the assessee had successfully discharged the onus casted upon him u/s 68 and the onus was on revenue to rebut assessee's evidences. 8.3 Proceeding further, we find that the sole basis of making impugned addition is the statement of one of the directors as recorded during the course of survey proceedings u/s 133A. However, this statement has been retracted within a span of 7 days. It is settled law that statements recorded during the course of survey proceedings would not have much evidentiary value unless the same are backed by credible evidences. This position has been settled by Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome in the hands of the assessee. In our opinion, nothing more was required at this stage since Ld. AO had sufficient reasons to form such a belief. Therefore, we do not find much substance in assessee's legal grounds. Ground Nos. 1 to 3 stand dismissed. 8.8 The appeal stands partly allowed in terms of our above order. This decision has subsequently been followed by another coordinate bench of the Tribunal in the case of assessee's sister concern namely M/s Moongipa Development & Inf. Ltd. for AYs 2009-10 & 2010-11, ITA Nos.625 & 626/Mum/2019 common order dated 04/12/2020 on identical facts and circumstances. 7. We find that facts in this year are quite identical to the facts of earlier years. In fact, Ld. AR has demonstrated that 13 entities out of the 16 entities are common entities as dealt with by the Tribunal in the captioned appeals as is evident from the following tabulation: - Regarding remaining 3 entities i.e. (i) M/s Gorsia Marine Equipment Pvt. Ltd.; (ii) M/s Sitaram Investment Pvt. Ltd.; (iii) M/s Marudhar Suppliers Pvt. Ltd., we find that the assessee had furnished similar sufficient documentary evidences as follows: - (i) Share Application Form (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to substantiate its case and satisfy three ingredients being identity, creditworthiness and genuineness of the transactions. The Hon'ble Tribunal has dealt elaborately on the net worth of these companies and percentage of the investments are comparatively lower than total net worth of the investor companies. Accordingly, we respectfully follow the judicial precedence and set aside the order of the CIT(A) and direct the assessing officer to delete the addition and allow this ground of appeal in favour of the assessee." 018. With respect to the facts we state that in M/S. MOONGIPA DEVELOPMENT AND INFRASTRUCTURE LTD. VERSUS DCIT CENTRAL RANGE-7 (3) , MUMBAINo.- I.T.A. Nos. 625 & 626/Mum/2019 Dated.- December 4, 2020 has recorded identical facts . In all these orders of coordinate bench there is no difference in facts. Thus those decisions covers addition with respect to Cheery Tie Up P Ltd, Deepa Holdings Limited , Hill View Hire Purchase Limited and Mot cab Finance Limited. Shagun Merchants Limited is the company though not covered under any of the above decisions but has identical facts and assessee has adduced similar kind of evidences. All these judicial precedents binds us. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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