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TMI Blog2022 (9) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... inspire confidence as to the genuineness of the transaction. Though the assessee has submitted details of the said transaction such as bank statements, profit and loss account, balance-sheet, copy of PAN, etc. the same did not inspire confidence as to the alleged impugned transaction because the credibility of the said concerns are questionable as per the financials of the same. The bank transactions of the investor companies seem to be ficitious and none of these alleged investor companies has shown the source of investment. From the above observation and by placing reliance on the decision of Sumati Dayal [ 1995 (3) TMI 3 - SUPREME COURT] and Navodaya Castle (P) Ltd [ 2015 (4) TMI 481 - SC ORDER] , NRA Iron Steel [ 2019 (3) TMI 323 - SUPREME COURT] we hold that the order of Ld.CIT(A) is not sustainable and thereby we set aside the order of the Ld.CIT(A) and uphold the order of the Assessing Officer. Decided against assessee. Validity of reopening of assessment u/s 147 - HELD THAT:- As it is evident that on the basis of the information received from the Investigation Wing that the assessee company is alleged beneficiary of having received share application money from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he beneficiaries of having received share application money of Rs.2 crores and Rs.4 crores from M/s Bhawna Computers Pvt Ltd and M/s Rowland Trexin Pvt Ltd, respectively alongwith other companies totalling Rs. 12 crores for which the details of the parties with the amount of share application money is as below:- S.No. Name of the Party Amount 1 Rowland Trexim P Ltd 4,00,00.000 2 Bhawna Computers P Ltd 2,00,00,000 3 Blue Jayay Airlines P Ltd 5,00,00,000 4 Mohan Highrise Pvt Ltd 20,00,000 5 Progro Stock P Ltd 20,00,000 6 Ujwal Jute and Fibre P Ltd 20,00,000 7 Vinayak Financial Consultant P Ltd 40,00,000 Total 12,00,00,000 The above companies are alleged to be the concerns of Shri Pradeep Poddar. The assessee submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Nova Promoters (2012) 18 taxmann.com 217 (Del), NRA Iron Steel (2019) 103 taxmann.com 48 (SC), Sumati Dayal (supra) and relied on the order of the Ld.Assessing Officer. 6. The Ld.AR for the assessee, on the other hand, alleged that the Assessing Officer in his reasons for reopening has erroneously specified the transaction as Rs.20 lakhs and R.40 lakhs from Bhawna Computers Pvt Ltd and Rowland Trexin Pvt Ltd instead of Rs.2 crores and Rs.4 crores. The Ld.AR relied on the decision of the Hon ble Gujarat High Court in the case of Manzil Diveshkumar Shah (2018) 95 taxmann.com 46 (Guj HC) and the Hon ble jurisdictional Bombay High Court in the case of HDFC Bank Ltd vs ACIT (2022) 136 taxmann.com 69 (Bom HC). The Ld.AR further stated that the Revenue has not substantiated its stand that the assessee company is not worth for the premium charged. The Ld.AR relied on the decision of Hon ble Delhi High Court in the case of BPTP vs PCIT (2020) 113 taxmann.com 587 (Delhi HC). The Ld.AR relying on the said decisions contended that mere low investment does not infer that the company is not capable of attracting huge premium. The Ld.AR has further placed his reliance on the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has further stated that the assessee has failed to prove the creditworthiness of the concerns that were advancing the loans or investing share application money and also the genuineness of the said transactions. The Assessing Officer has further stated that the assessee has not proved the nature and source of the amounts credits in its books of account much to the satisfaction of the Assessing Officer. The he Ld.CIT(A), on the other hand, has held that the assessee has proved the identity, genuineness and creditworthiness of the impugned investment company, whose net worth was found to be R.27.94 crores and the gross receipts being Rs.3,58,068/-, the profit for the year was Rs.1,01,819/- and the returned income was Rs.1,01,819/- and tax paid was Rs.31,462/-. Considering the same, the Ld.CIT(A) deleted the addition made with regard to the transaction with M/s Rowland Trexim Pvt Ltd to the tune of Rs.4 crores and have also deleted the addition pertaining to M/s Bhawna Computers Pvt Ltd and M/s Blue Jay Airlines Pvt Ltd. 9. It is pertinent to point out that the statement of Shri Pradeep Poddar, who was acting as dummy director in M/s Divine Tradecom Pvt Ltd, M/s Rowland Trexim Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the financials of the investor companies from page 77 onwards of the paper book it is evident that the alleged investment companies, though, has furnished the details such as the copy of returns, balance-sheet, profit and loss account, bank statement, etc. On perusal of the said documents, it is evident that there has been no business transaction carried out in the said companies. The transactions in the bank statements does not inspire confidence in us that these were genuine transactions. From the assessment order of M/s Bhawna Computers P Ltd, it is seen that the said company has received share application of Rs.15,08,50,000/- from various parties which was added to the income of the said company under section 68 of the I.T Act as unexplained cash credits. Similar transactions are also found in case of other alleged investor companies. The assessee has not produced any evidence to show the actual business carried out by the alleged companies either before us or before the lower authorities and also no evidence in support of accumulated income has been filed by the assessee. Resultantly, the investment made by these companies in the assessee company lacks trust as to its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted details of the said transaction such as bank statements, profit and loss account, balance-sheet, copy of PAN, etc. the same did not inspire confidence as to the alleged impugned transaction because the credibility of the said concerns are questionable as per the financials of the same. The bank transactions of the investor companies seem to be ficitious and none of these alleged investor companies has shown the source of investment. 11. From the above observation and by placing reliance on the decision of the Hon ble Apex Court in the case of Sumati Dayal vs CIT (supra) and Navodaya Castle (P) Ltd vs CIT (supra), NRA Iron Steel (supra), we hold that the order of Ld.CIT(A) is not sustainable and thereby we set aside the order of the Ld.CIT(A) and uphold the order of the Assessing Officer. 12. In the result, the appeal filed by the Revenue is allowed. Cross Objection No.42/Mum/2021 13. The cross objection filed by the assessee challenges the assessment order passed under section 143(3) r.w.s. 147 of the Act as invalid and bad in law. 14. The assessee has challenged the reopening of the assessment on the ground of verifying the genuineness of a particular tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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