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TMI Blog2022 (11) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... r considering all the evidences on record and also capacity of the investors who were having sufficient own sources, deleted the addition. Under these facts and circumstances we do not find any infirmity in the order of Ld. CIT(A) and accordingly grounds raised by the revenue are dismissed. - I.T.A. No. 2470/Kol/2019 - - - Dated:- 17-11-2022 - Shri Rajesh Kumar, Accountant Member And Shri Sonjoy Sarma, Judicial Member For the Appellant : Shri Siddharth Agarwal, Advocate For the Respondent : Shri Sudipta Guha, CIT DR ORDER PER RAJESH KUMAR, AM: This appeal is preferred by the revenue against the order of the Ld. Commissioner of Income Tax(Appeals)-17, Kolkata (hereinafter referred to as the Ld. CIT(A) ] dated 20.03.2019 for the AY 2012-13. 2. The common issue raised in the various grounds of appeal by the revenue is against the deletion of addition of Rs. 20,20,00,000/- by the Ld. CIT(A) as made by the AO u/s 68 of the act by ignoring the facts that the assessee has failed to prove identity, creditworthiness of the investors and genuineness of the transactions. 3. Facts in brief are that the assessee filed return of income on 19.09.2012 declaring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. CIT(A) allowed the appeal of the assessee after taking into account the detailed submissions/evidences filed by the assessee which are reproduced by the Ld. CIT(A) in para 3 of the appellate order which is observing and holding as under: I have considered the finding of the AO in the assessment order as well as the remand report and the submissions made by the AR of the appellant in during the course of the appellate proceedings. Ground No. 1 is regarding the addition of Rs. 20,20,00,000/- u/s 68 of the Act on account of share application money received by the appellant. The AR during the course of appellate proceedings on the fact that the money has been received by the appellant from its group companies having common directors or directors being the relatives and family members of the directors of the appellant. Also, in the paper book submitted, the AR has submitted all the documents relating to the share applicants to prove the 3 ingredients of section 68 i.e. the identity, creditworthiness of the applicants and genuineness of the transaction. I have examined the submission of the appellant. The documents submitted in the paper book running into pages 1-16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06PLC111698. On examination, the Audited accounts available at the paper book at page 95-112, it was seen that the company was having a paid up capital with free reserves and surplus of Rs. 27,40,65,772/- as on 31/03/2012. On examination, the ITR Acknowledgement and the copy of PAN Card submitted in the paper book it was seen that the company duly filed its return of income before ITO Ward 9(1), Kolkata and was having PAN AAECP1453D. Also, I find that the share application was made through proper banking channel. The copy of the bank statement of the Company is duly available in the paper book. The details of source of funds from which this company had made the share application are also available from a perusal of the bank statement and other documents filed in the paper book. In respect of the share applicant M/s Parasnath Re-Rolling Mills Pvt. Ltd., the relevant details and documents were given at page nos. 115-161 of the paper book submitted by the appellant. The applicant has invested Rs. 6,28,00,000/- in the appellant company. From the details submitted, I find that the directors of the appellant company i.e. Mr. Vipin Kumar Jain and Mr. Tarun Jain were also the director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the remand report reproduced is as under, also suggest callousness of the AO: 1) The A/R was allowed an opportunity of hearing, inspection of the assessment records and the Paper Book/written submission on 16/2/2017 - after such examination the A/R stated that-the Paper Book (page 1-161) contains no any additional evidence that may have been sought to be admitted in Appeals (which were not submitted before the A.O during the assessment proceeding). Thus the general query on this point may be considered as reported. 2) The A.O had passed a speaking assessment order after considering all documents and evidences filed by the appellant before him during the proceeding, in respect of share capital. There is no scope of further verification of such documents by issue of notice u/s 131, to arrive at any different conclusion by me and thus the matter rests on your honour s judicious. Thus, A.O. has just vaguely tried to allege the transaction to be ingenuine without havingany substantial supporting evidence. I have considered the submissions of the AR, reply to the remand report and all the facts and details brought on record by the AR. 1 find merit in the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT vs. M/s Nishan Indo Commerce Ltd. dated 2.12.2013 in ITA No. 52 of 2001. vii) Co-ordinate Bench of ITAT, Kolkata in the case of ITO vs. Trend Infra Developers Pvt. Ltd. in ITA NO. 2270/Kol/2016 dated 26.10.2018. viii) Co-ordinate Bench of ITAT, Kolkata in the case of ITO vs. M/s Wiz Tech Solutions Pvt. Ltd. in ITA No. 1162/Kol/2015 dated 14.06.2018. ix) Co-ordinate bench of ITAT, Kolkata in the case of ITO, vs. Goldstar Tracom Pvt. Ltd. in 54 CCH 191 dated 09.11.2018 x) Co-ordinate Bench of ITAT, Kolkata in the case of ACIT vs. Global Mercantile Pvt. Ltd. in [2016] 46 CCH 41 dated 13.01.2016 xi) Co-ordinate bench of ITAT, Kolkata in the case of ITO vs. Mastermind Shoppers Pvt. Ltd., in ITA No. 2278/Kol/2016 dated 27.02.2019 Besides the above relied case laws, there is plethora of decisions affirming the fact that if the appellant has discharged its onus by proving the identity, genuineness and creditworthiness of the transaction by producing sufficient and satisfactory documentary evidences, then the burden shifts on the revenue to counter the same and prove the transaction to be ingenuine. In the present case, as discussed above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. In fact, the A.O. had not dealt with the specific facts of the case. ? The explanations submitted by the appellant and the judgments' of Hon'ble Supreme Court and various judgements of Hon ble High Courts and Income Tax Appellate Tribunal including jurisdictional High Court and Jurisdictional Tribunal were not distinguished nor found to be inapplicable by the A.O. The appellant has furnished all documentary evidence which the Assessing Officer has chosen to ignore or not deal with both at the time of assessment as well as the remand proceedings. The Assessing Officer disregarded the submissions of the appellant and all documentary evidences produced/furnished by it in relation to the share capital. The Assessing Officer did not bring on record any legal evidence or material on record to hold that the appellant's transactions relating to share capital were bogus. I also find that the finding of the Assessing Officer is based merely on the suspicion and surmises without any tangible material to show that the appellant has introduced his own unaccounted income in the share capital. Therefore, in absence of any evidence, it cannot be held that the appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax acknowledgments were placed on AO's record. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO based on conjectures and surmises is not justified. In view of the above facts and circumstances of the case as discussed above, I agree with the contention of the AR that no addition was warranted under Section 68 of the Act. In view of the above discussions and various judicial decisions of the Hon ble Apex Court various High Courts including jurisdictional High courts and various ITAT including the jurisdictional ITAT, I find that the all the decisions as relied are squarely applicable to the case of the appellant. I agree with the contention that the addition made by the AO is without any cogent material on record and is purely based on his surmises. Therefore, it is held that the addition made by the AO u/s 68 of RS. 20,20,00,000/- in completely unjustified. Accordingly, AO is hereby directed to delete the addition. The appeal on this g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a conclusion on flimsy and clumsy grounds such as assessee not having regular business transactions with the investors in past or future , investors making huge investments, the assessee not coming forward for cross-examination etc. The Ld. A.R. referred to page no. 2 of the appellate order and submitted that in para 3, the Ld. CIT(A) has discussed and dealt with the reply of the assessee in detail. The Ld. A.R submitted that the assessee is not sham or shell company but is a company doing substantive business of manufacturing of various steel and allied products like angle, channel, joists, wire rod, H-Beam, billets etc. through its head office at Durgapur, West Bengal where the factory is located. The ld. Counsel for the assessee also submitted that during the impugned year, the total turnover of the assessee is Rs. 637.76 crores and the assessee is an approved vendor of NHPC, UNITECH, TATA Wipro, Power Grid, DLF etc. Then the Ld. Counsel for the assessee referred to para 3.2 of the Ld. CIT(A) wherein the details of share application money received from three group companies were given along with their addresses, PAN nos. and amounts etc. The Ld. A.R. also referred to para 3.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate order, we find that the assessee has received share application money during the year amounting to Rs. 20,20,00,000/- from the three investor companies admittedly and undisputable group companies the details whereof are given hereinabove in para 3. We note that all these three investor companies related to the assessee with common directors and having cross shareholdings the details whereof are given in para 3.4 page 3 of the appellate order. We observe that the allegation of AO is negated and neutralized that the assessee is not having regular business transactions with the investors and investments were made without having any business transactions in the present or in the past and also the fact of group companies having not substantiated and proved. We note that the assessee company s total turnover during the Year was Rs. 637.76 crores and the assesse company is doing business of manufacturing of various steel and allied products like angle, channel, joists, wire rod, H-Beam, billets etc. through its head office at Durgapur, West Bengal where the factory is located. Besides we note that assessee is also an approved vendor of NHPC, UNITECH, TATA Wipro, Power Grid, DLF etc. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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