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TMI Blog2022 (8) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... y may have been provided by some other persons. If the assessment of the persons, who are alleged to have really advanced the money is sought to be reopened, that would have made some sense but we fail to understand as to how this amount of increased share capital can be assessed in the hands of the company itself. As assessee has successfully discharged its onus by proving the identity, genuineness of the transaction and the creditworthiness of these two share applicants namely Sadgi Agarwal and Milestone Commosales Pvt. Ltd. which utilised the loan taken from another company namely M/s. Tobu Engineering Ltd. for making investment in the assessee company and also under the given facts and circumstances where the share application money rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in assessing Rs. 35,00,000/- as unexplained cash credit merely based upon his own surmises and conjectures. 5. For that the under the facts and circumstances of the case the Ld. CIT(A) erred in considering the share application money of Rs. 35,00,000/- as unexplained cash credit whereas all the information were duly on records. 6. For that the appellant craves leave to add, alter or withdraw any ground/s of appeal on or before hearing of the appeal." 3. Brief facts of the case as culled out from the records are that the assessee is a private limited company. E-return of income for AY 2012-13 filed on 08.11.2013 disclosing income of Rs. 340/-. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2) & 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remaining addition u/s 68 of the Act made for share application money received from Tobu Engineering Ltd., Reward Suppliers Pvt. Ltd., Mahamaya Dealtrade Pvt. Ltd., Appear Distributors Pvt. Ltd. holding that these corporates have sufficient net worth to make investment in the assessee company and the identity and genuineness of the transaction was not in dispute. Thus, Ld. CIT(A) confirmed the addition u/s 68 of the Act at ₹ 35 lakh on the ground that the assessee company failed to prove the creditworthiness of the two cash creditors namely Sadgi Agarwal and Milestone Commosales Pvt. Ltd. 5. Aggrieved, the assessee is now in appeal before the Tribunal. Ld. Counsel for the assessee reiterated the submissions made before Ld. CIT(A) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 6 are general in nature and the remaining ground nos. 2 to 5 are only challenging the finding of the Ld. CIT(A) confirming the addition for unexplained cash credit of ₹ 35 lakh made by the Ld. AO u/s 68 of the Act. 8. We observe that the assessee company issued 31,800 equity shares of face value of ₹ 10/- at a share premium of ₹ 40/- each thereby increasing its paid-up capital by ₹ 31,80,000/- and security premium account by ₹ 1,27,20,000/-. Ld. AO made addition u/s 68 of the Act at ₹ 1,59,00,000/- for unexplained share capital and security premium. When the matter travelled before the first appellate authority, the assessee got part relief and dispute before us is only limited to the addition of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... So, the common fact is that both the alleged share applicants received loan from M/s. Tobu Engineering Ltd. and applied the alleged amount for making investment in the assessee company and, therefore, on the date of making the investment both the alleged share applicants had sufficient credit in their account to make an investment. So, prima facie the assessee has proved the source of source of the share application money by placing on record the proof that the assessee company received share application money from Sadgi Agarwal and Milestone Commosales Pvt. Ltd. and both these share applicants received loan from M/s. Tobu Engineering Ltd. 10. It is also worth noting that M/s. Tobu Engineering Ltd. is also one of the share applicants whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices Pvt. Ltd. (supra) held that "it is quite obvious that it is very difficult for the assessee to show the creditworthiness of strangers. If the Revenue had any doubt with regard to their ability to make the investment, their returns might be reopened by the Department. In any case, what was clinching was the additional burden on the Revenue. It must show that even if the assessee did not have the means to make the investment, the investment made by the assessee actually emanated from the coffers of the assessee so as to enable it to be treated as the undisclosed income of the assessee. As this had not been done in so far as the present case was concerned, addition made was to be deleted." 14. Honourable Delhi High Court in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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