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TMI Blog2022 (12) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order by quashed". 4. Facts in brief are that the assessment in this case was framed u/s 143(3) vide order dated 26.03.2015 wherein an addition of Rs. 2,57,00,000/- was made on account of share capital and share premium after calling for information/details from the assessee. Thereafter the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 dated 27.03.2019 which was apparently after the period of four years from the end of relevant assessment year and again the assessment was framed u/s 143(3) read with Section 147 vide order dated 16.12.2019 wherein the addition was made to the tune of Rs. 2,73,00,000/- in respect of share capital and share premium. Pertinent to state that the case of the assessee was reopened after the AO received information from the DDIT(Inv)-2(2), Kolkata dated 11.03.2019 that during the FY 2011-12 the assessee company bank account was credited with Rs. 2,73,00,000/- received from various entities which were shell companies. 5. In the appellate proceedings, the assessee challenged the legal issue before the Ld. CIT(A) however the appeal of the assessee was dismissed by the first appellate authority by observing and holdin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares were allotted, along with details such as bank statements, share application forms, share allotment advices, share certificates, minutes of the board meetings, share holders KYC details etc. and any other ID proofs. The AO again issued show cause notice dated 17.02.2015 as no one appeared on the first date of hearing, fixing the date of hearing on which the counsel of the assessee appeared before the AO and adjournment was sought on the ground that the concerned director of the assessee company was out of station and accordingly the case was re-fixed on 17.03.2015. On 17.03.2015, Shri Ajay Agarwal, one of the directors of the assessee company appeared and his statement was recorded. The AO noted that Shri Ajay Agarwal is also one of the director of the share holding company M/s Zircon International Pvt. Ltd. and Shri Ajay Agarwal stated before the AO that M/s Zircon International Pvt. Ltd. is a group company under the same management. The AO also noted in the assessment order that the assessee had failed to produce the directors of other companies nonetheless all the necessary documents were filed before the AO as called for in respect of all the investors. Finally the AO note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y allowed the appeal of the assessee by deleting the addition to the tune of Rs. 2,57,00,000/- on the ground that addition was already made in the original assessment order whereas the detailed remaining 33 lacs was sustained on the ground that amount shown in the show cause notice dated 7.12.2019 by the AO was Rs. 2,73,00,000/0- which is more than the amount as per the reply dated 17.03.2015 filed by the assessee wherein the amount received from various six investors was shown at Rs. 2,57,00,000/-. The Ld. CIT(A) dealt with this issue in para 7.2 to 7.5 of the appellate order. For the sake of convenience, we reproduce the table on the basis of which the Ld. CIT(A) drew inference that the difference of Rs. 33,00,000/- was liable to be sustained: Sl. No. Name of the party from which fund received As per show cause notice issued by AO dated 7.12.2019 As per reply dated 17.03.2015 of assessee Difference in amount of column 3 & 4 1 2 3 4 5 1. Excel Financial Consultants Pvt. Ltd. Rs. 60,00,000/- Rs. 77,00,000/- 2. Jagmangal Vanijya Pvt. Ltd. Rs. 40,00,000/- Rs. 40,00,000/- 3. Amtek Financial Consultants Pvt. Ltd. Rs. 58,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash credit u/s 68 of the Act. 9. Facts in brief are that during the year, the assesse has allotted equity shares of face value of Rs. 10/- each at premium at Rs. 490/- per share and at 1990 per share. During the course of assessment proceedings, the AO issued notice u/s 131 of the Act dated 9.2.2015 to the directors of the assessee company and asked to appear with certain details as mentioned in para 3 of the assessment order at page no.1. The director of the assessee company Shri Ajay Agarwal appeared before the AO on 17.03.2015 and his statement was recorded. Mr. Ajay Agarwal stated that M/s Zircon International Pvt. Ltd. is a group company and he is director on that company also. However he failed to produce the directors of the other share holding companies nonetheless the assessee filed before the AO, the details of share capital and share premium as required by the AO comprising with names, addresses, PANs, bank statements, confirmations etc. The AO has also issued notices u/s 133(6) to the investors which were duly responded by the shareholders. The AO treated the share capital and share premium of Rs. 2,57,00,000/- as unexplained cash credit on the ground that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even note that the notices issued u/s 133(6) of the Act to the investors were duly responded furnishing all the details and evidences qua the share subscriptions. The AO added the amount merely on the ground that since the subscribers of the shares were not produced personally, the impugned increase in share capital and share premium could not be verified and remained unexplained. The Ld. CIT(A) simply confirmed the order of the AO without giving any reasoned findings. We have perused the facts as placed before us and find that in respect of each share subscribers the assessee has produced ITR, audited accounts, share application form, share allotted letter, bank statement, certificate of incorporation, memorandum of article, reply filed in response to notice u/s 133(6) of the Act and even some cases source of source was also filed. Thus we note that the transactions of increase in shares are adequately explained. We also note that in some cases, even the assessment framed in the case of share subscribers were also filed before the AO. The ground for addition was nonproduction of share subscribers before the AO without commenting on the evidences filed by the assessee investors/sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant-assessee for non-appearance of other five traders to whom summons of the Assessing Authority could not be served. On this ground itself, the order of the Assessing Authority cannot be found reasonable, tenable and justified. As noticed above, the Assessing Authority for the assessment year 1983-84 had accepted the claim of the appellant-assessee having acted as Commission Agent in respect of the same articles which were brought by the sellers to the Arhatdaars in the Mandi for sale." b) In the case of H.R. Mehta vs. ACIT, Mumbai in ITA No. 58 of 2001 dated 30.06.2016,the Hon'ble Bombay High Court has held as under: "11. We have therefore proceeded to hear and decide the matter unassisted by the revenue. In the course of his submissions Mr. Tralshawala had pressed into service inter alia the decision of the Calcutta High Court in Mather and Platt (India) Ltd. (supra) and submitted that merely because a person is not found at an address after several years it cannot be held that he is non-existent and that the assessee had discharged his primary onus by identifying the source of the amount paid. The Court observed that once the primary onus is discharged, the onus sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solve the assessee from his responsibility of proving the nature of transaction. There is no discussion by the assessing officer on the correctness of the stand taken by the assessee. Thus, going by the records placed by the assessee, it could be safely held that the assessee has discharged his initial burden and the burden shifts on the assessing officer to enquire further into the matter which he failed to do. In more than one place the assessing officer used the expression "money laundering." We find such usage to be uncalled for asthe allegations of money laundering is a very serious allegations and the effect of a case of money laundering under the relevant Act is markedly different. Therefore, the assessing officer should have desisted from using such expression when it was never the case that there was any allegations of money laundering. Paragraph 5.4 and 5.5 of the assessment order are all personal perception and opinion of the assessing officer which needs to be ignored. Much reliance was placed on the statement of Shri Ashish Kumar Agarwal, which statement has been extracted in full in the assessment order and it cannot be disputed that there is no allegation against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any such finding, we have to hold that the order passed by the assessing officer was utterly perverse and rightly interfered by the CIT(A). The Tribunal re-appreciated the factual position and agreed with the CIT(A). The tribunal apart from taking into consideration, the legal effect of the statement of Ashish Kumar Agarwal also took note of the fact that the notices which were issued by the assessing officer under Section 133 (6) of the Act to the lenders where duly acknowledged and all the lenders confirmed the loan transactions by filing the documents which were placed before the tribunal in the form of a paper book. These materials were available on the file of the assessing officer and there is no discussion on this aspect. Thus, we find that the tribunal rightly dismissed the appeal filed by the revenue. d) In the case of M/s Diagnostics vs. CIT & Anr in ITA No. 153 of 2004 dated 04.03.2011, the Hon'ble Calcutta High Court has held as under: "After hearing Mr. Sen, the learned advocate appearing on behalf of the appellant, and Mr. Agarwal, the learned advocate appearing on behalf of the Revenue and after going through the materials on record, we agree with the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editworthiness. As rightly pointed out by the learned counsel that the Commissioner of Income-tax (Appeals) has taken the trouble of examining of all other materials and documents, viz., confirmatory statements, invoices, challans and vouchers showing supply of bidis as against the advance. Therefore, the attendance of the witnesses pursuant to the summons issued, in our view, is not important. The important is to prove as to whether the said cash credit was received as against the future sale of the product of the assessee or not. When it was found by the Commissioner of Income-tax (Appeals) on facts having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact finding. Indeed the Tribunal did not really touch the aforesaid fact finding of the Commissioner of Income-tax (Appeals) as rightly pointed out by the learned counsel. The Supreme Court has already stated as to what should be the duty of the learned Tribunal to decide in this situation. In the said judgment noted by us at page 464, the Supreme Court has observed as follows : "The Income-tax Appellate Tribunal performs a judicial function under t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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