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TMI Blog2023 (2) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt. Ltd. [ 2015 (1) TMI 1119 - ITAT DELHI] , Vijay Conductors India Pvt. Ltd. [ 2015 (9) TMI 1519 - DELHI HIGH COURT] and AGM Holdings Ltd. [ 2016 (3) TMI 1449 - ITAT DELHI] is not available for the assessee in the present case having distinct and dissimilar facts as the assessee could not substantiate the fact that it is a conduit company of Keti group of companies. Therefore, we are inclined to hold that since the assessee company has not discharged the onus lay on the shoulders of it that it is a conduit company and also has not successfully proved and established the identity, capacity and credit worthiness of 40 investor companies and genuineness of the transaction, therefore, the AO was right in making addition in the hands of the assessee u/s 68 of the Act and the ld.CIT(A) was also correct in confirming the same. Decided against assessee. - ITA No.225/Ind/2018 - - - Dated:- 10-2-2023 - Shri C.M. Garg, Judicial Member And Shri Bhagirath Mal Biyani, Accountant Member For the Assessee : Shri Pankaj Shah, CA And Shri Somya Bumb For the Revenue : Shri P.K. Mishra, CIT, DR ORDER PER C.M. GARG, JM: This appeal filed by the assessee is directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application money under Section 68 of the Act amounting to Rs.24,14,75,000 as he failed to appreciate that the same has already been taxed in the hands of Keti Constructions Limited and also in the hands of its special purpose vehicle companies (SPVs), therefore, the said addition may kindly be deleted. Further, drawing our attention to page 9 of the assessee s paper book, the ld. Counsel submitted that the assessee received share application money of Rs.24,14,75,000/- and, simultaneously, made investment in share application money with Keti Constructions Ltd. of Rs.24,09,50,000/-, therefore, the money merely came to the assessee in the form of share application money and, further transferred to M/s Keti Construction Ltd. as share application money. Further, drawing our attention to pages 15 and 16 of the assessee s paper book, the ld. Counsel submitted that the assessee received share application money of Rs.24,14,75,000/- from 40 entities and made investments of Rs.24,24,32,085/- including investment as share application money with M/s Keti Construction Ltd. of Rs.24,09,50,000/-, therefore, the source of share application money and its further investment in share application mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee could not discharge the onus lay on its shoulders to escape from the rigors of the provisions of section 68 of the Act. Further, drawing our attention to first appellate order, the ld.CIT-DR submitted that the ld.CIT(A), after considering the entire facts and circumstances, has rightly upheld the findings arrived at by the ld. AO because further use of the amount received in the form of share application money from 40 entities is of no relevance. The assessee was duty bound to establish the identity of 40 investors listed at page 25 of the assessee s paper book along with their capacity and credit worthiness and also the genuineness of the transaction and, thereafter, the assessee could successfully escape from the rigors of section 68 of the Act. The ld.CIT-DR submitted that the ld.CIT(A) has dealt with the issue elaborately in paras 4.2 to 4.2.5 which are unambiguous and clear, therefore, in view of the judicial pronouncements relied on by the ld.CIT(A), the addition made by the AO may kindly be confirmed. 7. Placing rejoinder to the above, the ld. Counsel placed reliance on the following Judgements:- (i) Omni Farms P. Ltd (2017 85 taxmann.com 214) (ITAT Del); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the ld.CIT(A) and the appeal is pending before the concerned ld. First appellate authority for adjudication. Therefore, we safely presume that M/s Keti Construction Ltd. has not accepted the addition made by the AO in their hands u/s 68 of the Act and litigation is going on. 11. So far as the mention in ground 3.2 of the assessee that the amounts have been taxed in the hands of the respective four SPV companies is concerned, during the arguments, the ld. Counsel of the assessee has drawn our attention to the assessee s paper book pages 26 to 50 and submitted that no addition has been made in the hands of four SPV companies on this account, therefore, the facts mentioned in the grounds of the assessee are contrary to the factual position revealed from the documents submitted by the assessee itself. 12. So far as the contention of the ld. AR that the assessee is a conduit company which is part of group of Keti Construction Ltd. is concerned, admittedly, the assessee company has received the impugned amount in the form of share application money from the 40 entities as listed at page 15 of the assessee s paper book amounting to Rs.24,14,75,000/- and simultaneously made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor companies and genuineness of the transaction. We may point out that the assessee has shown that the amount was invested in group head company M/s Keti Construction Ltd. and M/s Keti Construction Ltd. further invested the same in four group SPV companies, but, this fact would be relevant if the assessee successfully establishes that the entities or companies who made investments as share application money to the assessee company are also group companies having clear identity and having capacity and credit worthiness to invest the amount establishing genuineness of the transaction. But, in the present case, the assessee cannot be held as conduit company because capacity and credit worthiness of 40 companies who invested share application money in the assessee company and genuineness of transaction has not been established. 15. It may also be pointed out that the assessee cannot be held as intermediary company because the assessee has not successfully established that the source companies are also group companies and it is working merely as middleman entity and a conduit company. Therefore, the benefit of the judgements relied on by the assessee in the case of Omni Farms Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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