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TMI Blog2022 (11) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... the instant assessment year. Considering the above facts and circumstances of the case, we are inclined to set aside the order of CIT(A) by allowing the appeal of the assessee. - I. T. A. No. 2624/Kol/2018 - - - Dated:- 9-11-2022 - Shri Rajpal Yadav , Vice - President ( KZ ) And Shri Rajesh Kumar , Accountant Member For the Appellant : Shri Akkal Dudhwewala , A. R For the Respondent : Shri P. P. Barman , Addl. CIT ORDER Per Rajesh Kumar , AM : This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-3, Kolkata [hereinafter referred to as Ld. CIT(A) ] dated 30.10.2018 for the assessment year 2012-13. 2. The only issue raised in various grounds of appeal is against the order of Ld. CIT(A) confirming the addition of Rs. 1,08,00,000/- as made by the AO u/s 68 of the Act in respect of share capital/share premium received by the assessee during the year. 3. Facts in brief are that the assessee filed return of income on 26.11.2012 declaring total income at Nil. The case of the assessee was selected for scrutiny through CASS and statutory notices were duly issued and served on the assessee. During the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in which the investment in the shares of the assessee company was duly confirmed. The AO however in the remand report reiterated that these investor companies were not engaged in any business and have no income but despite that they have invested in share capital/ share premium of the assessee company.Based on the said remand report the ld CIT(A) simply dismissed the appeal of the assesse. 5. The ld. A.R. submitted before the bench that the authorities below have failed hopelessly to appreciate the facts and evidences filed by the investor companies incorrect perspective. The ld. A.R. submitted that the assessee has furnished all the details/proofs evidencing the receipt of investments from the two investors in the assessee company. The counsel of the assessee submitted that the shares were issued at a high premium as there was no bar on issuing shares at a high premium till AY 2012- 13 and it was a business decision taken by the Board of Directors of the assessee company. The Ld. A.R. submitted that the assessee company has issued equity share at premium in order to finance its project qua which land has already been acquired. The Ld. A.R. submitted that the assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or before issuing a/c payee cheques. The Ld. A.R. submitted that the fact of investor companies were not having any business during the assessment year or in the preceding year would not automatically make the investments as unexplained as has been done by the AO. The AR even pointed out that there was gross nonapplication of mind by the AO to the facts on records by submitting that in the assessment year as well as in the remand report, the AO mentioned the assessee company was not having any business whereas as a matter of fact the assessee had filed return of income showing an income of Rs. 2,55,345/-. The ld. A.R. also controverted the findings of the AO in the remand report that the assessee company did not furnish any documents by submitting that the notices were received by the assessee on 25.08.2017 and were replied along with necessary documents on 12.09.2017 which was duly acknowledged. The Ld. A.R also denied the observations of the AO in the remand report that the assessee company is not a non-banking finance company as the balance sheet as on 31.03.2012 did not show the business of NBFC. The ld AR submitted that the assessee made an investment into unlisted equity sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that said company was having sufficient net worth out of which Rs. 58 lakhs was invested in the assessee company and thus the said company has the creditworthiness to make investment in shares of the assessee company. As regards identity, the Ld. A.R. submitted that the said company was subjected to tax by way of scrutiny assessment in AY 2007-08 and therefore the identity of the said company shall stand established. As regards the genuineness, The Ld. A.R submitted that the transactions were made through a/c payee cheques and nothing was brought on record by the authorities below to prove these are non-genuine transactions. The Ld. A.R submitted that the said investor company duly showed the amount of investment made by the said investor company in the assessee company therefore the genuineness of the said transactions were also proved. The Ld. A.R. submitted that the observations of the AO in the remand report that the director of M/s Piyush Commodity Pvt. Ltd. had appeared and did not produce the documents such as details of director, shareholdings of the company are wrong.The Ld. AR submitted that the said investor company was incorporated on 12.10.2007 and has regularly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were issued by the assessee company of Rs. 67,500/- face value of Rs. 10/- each at a premium of Rs. 150/-. We note that the assessee has filed all the details before the AO qua these investments and evidences connected therewith. Besides the AO issued notice u/s 133(6) to both these investor companies which was duly responded by filing necessary details even this summons u/s 131 of the Act were duly complied with by both these companies. The director of M/s Knitworth Exports Ltd. appeared before the AO and statement were recorded on two occasions as stated hereinabove and they confirm to have investment made to the assessee company. The Second investor M/s Piyush Commodity Pvt. Ltd. who did not comply with the summons in the assessment proceedings but duly complied with the summons in the remand proceedings and reiterated the facts that investment which was disclosed in their books of accounts. We note that the AO has only doubted that the investor company was not carrying any business during the year or succeeding year and therefore the investment is not genuine and creditworthiness is also warranted with doubts. The Ld. CIT(A) affirmed the order of AO without appreciating the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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