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TMI Blog2023 (5) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, we confirm the finding of ld. CIT(A). Addition made u/s 68 of the Act regarding share capital and share premium received from received from two concerns namely M/s. Blossom Vinimay Pvt. Ltd. and M/s. Baliraja Distributors Pvt. Ltd. - As we notice that sufficient opportunities were granted to the assessee and except filing the financial statement, he was unable to discharge its onus to explain the nature and source of the alleged sum received against issue of equity shares Section 68 of the Act is invoked if any sum is found credited in the books of an assessee for which the assessee either does not offer any explanation about the nature and source thereof or the explanation offered by him is not found to be satisfactory in the opinion of the AO. In the given case, though the assessee has given the explanation by filing the financial statements of the share applicants but they are in itself not sufficient to satisfy ld. AO as well as ld. CIT(A) and even we are also not satisfied with the nature and source of the alleged credit. Before us the assessee has even not filed the audited financial statement of the assessee company. Merely proving the identity of the share su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Similarly, in the case of I.T.A. No.: 2569/KOL/2018 in the past on 10.08.2022, 07.12.2022, 08.12.2022 even today none appeared on behalf of the assessee even when notices were sent through registered post. Both these appeals are at the instance of the Revenue and in the records, we are able to lay hand on paperbook containing 92 pages and in the top of the paperbook date of hearing is mentioned 11.09.2018. This paperbook has been given only in the case of M/s. Dreamz Life Care Nursing Diagnostic Centre Pvt. Ltd. Since then there is no representation on behalf of the assessee and since the appeals are of year 2016 2018 i.e. almost 7 years 5 years old, we deem it proper to adjudicate these appeals ex-parte qua the assessee based on the material available on record and considering the submissions of ld. D/R. Facts in I.T.A. No.: 2038/KOL/2016, M/s. Dreamz Life Care Nursing Diagnostic Centre Pvt. Ltd.: 3. Facts in brief are that the assessee is a private limited company. Income of Rs. 2,56,398/- declared in the e-return filed on 29.08.2012 for AY 2012-13. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2) 142(1) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning sum of 2.75 Cr made the addition u/s 68 of the Act for unexplained cash credit and further, made an addition by disallowing the commission expense of Rs. 6 lakh allegedly paid by the assessee to arrange for the alleged bogus share capital. Income assessed at Rs. 2,84,86,840/-. 5. Aggrieved, both the assessees preferred appeal before ld. CIT(A) against the additions made by ld. AOs and filed the details of the share subscribers and their financial statements and ld. CIT(A) was satisfied with those details and deleted the additions made u/s 68 of the Act in case of both the assessees and also deleted the disallowance of commission expense. 6. Aggrieved, the Revenue is now in appeal before this Tribunal raising following grounds: I.T.A. No.: 2038/KOL/2016, M/s. Dreamz Life Care Nursing Diagnostic Centre Pvt. Ltd.: 1. On the facts and in circumstances of the case Ld. CIT(A) had erred to allow relief on this ground on the view that all the share applicants are existing assessees and no adverse finding have been found by the AO, without considering the failure from the part of the assessee to prove visual activity of business and creditworthiness to make investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Blossom Vinimay Pvt. Ltd. 1.93 Cr (share premium of Rs. 190/- per share) 4 Baliraja Distributors Pvt. Ltd. 50 lakh (share premium of Rs. 190/- per share) Total 2.61 Cr 9. In the case of another assessee i.e. M/s. Dreamz Movies Entertainment Pvt. Ltd. in I.T.A. No.: 2569/KOL/2018, the addition for unexplained share capital and share premium was made by ld. AO towards the sum received from the following share subscribers: Sl. No. Name Share Premium 1 Baliraja Distributors Pvt. Ltd. 50 lakh (share premium of Rs. 190/- per share) 2 Blossom Vinimay Pvt. Ltd. 2.25 Cr (share premium of Rs. 190/- per share) Total 2.75 Cr 10. From above, we notice that equity shares have been allotted by both the assessee companies to four share subscribers of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do- 30000 10 - 300000 3 Baliraja Distributors Pvt Ltd 1/1 Meridith Street, 4 th Floor, Kolkata-69 25000 10 190 5000000 4 Blossom Vinimay Pvt Ltd 3 Parbati Chakraborty Lane, Kolkata-26 112500 10 190 22500000 Total 177500 2,7900000 It appears that assessee company issued shares to Dreamz Pbc Weblength Pvt. Ltd. Dreamz Wealth Consulting Pvt. Ltd. 10,000 and 30,000 respective at face value @ 10 without any premium. Whereas the assessee company issued shares to Baliraja Distributors Pvt. Ltd. and Blossom Vinimay Pvt. Ltd 25,000 and 112500 respectively face value @ 10 and premium @190. Notice u/s. 133(6) of the IT Act was issued on 25.7.2014 to aforesaid two parties to verify the transactions. It appears fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice summons dated 17.02.2015 to produce the director of other allottee company and director of Baliraja Distributors Pvt. Ltd for relevant period. The assessee by letter dated 27.12.2015 stated that, Relevant portion of bank statement of the company Baliraja Distributors Pvt. Ltd, highlighting the transactions in which the share application money was given to our company. They had also produced before you the relevant part of bank statement, explaining the source of fund which was given to Dreamz movies towards share application money . Thus the assessee avoided it responsibility. On scrutiny of Balance Sheet, P L A/c of Baliraja Distributors Pvt. Ltd Blossom Vinimay Pvt Ltd it appears that these are paper/ shell company. It is already mentioned that the allottees have no business activities and investment was made from sale of unquoted shares. In order to examine genuineness of the fresh capital raised identity of the persons and creditworthiness was required to be established. The appearance of the director of the assessee company as well as the directors of the said allottee companies who had invested fresh share capital in the assessee company was necessary to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is well settled principle of law as declared by the Hon'ble Supreme Court in the case of Sumati Dayal Vs. CIT (214 ITR 801) (SC) that the true nature of transaction have to be ascertained in the light of surrounding circumstances. It needs to be emphasized that standard of proof beyond reasonable doubt has no applicability in determination of matters under taxing statutes. It is also well settled that tax authorities are entitled to look into surrounding circumstances to find out the reality of the transaction by applying the test of human probability. This was the principle laid down by the Hon'ble Supreme Court in the case of CIT Vs. Durga Prasad More 82 ITR 540 (SC). In this connection reliance is placed in decision of Hon'ble ITAT, Kolkata in the case of M/s. Bisakha Sales Pvt. Ltd. vs. CIT. In its judgment hon'ble ITAT has discussed the issue elaborately regarding activities of tax escapement and to channelize the black money through issuing share premium. Reference is also invited to the decision of the Hon'ble ITAT in the cases of: M/s Star Griha Pvt. So it was highly required to investigate what was the actual motive in the mind of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account Rs.403462/- Add: Depreciation to be considered separately Rs. 26102/- Share capital as discussed Rs.27500000/- Bogus commission Rs. 600000/- Rs.28126102/- Gross total income RS.28529564/- Less: Depreciation allowable Rs.42721/- Income from business Rs.28486843/- Total Income Rs. 28486840/- Tax payable as per computation enclosed. Proceedings u/s 271(1)(c) of the IT Act has been initiated for concealment of particulars of income. Assessed u/s 143(3) of the IT Act as above. Issue D.N, computation copy of the order to the assessee. 12. From going through the above finding of ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of hearing there is no representation on behalf of the assessee and since 2019 no efforts have been taken by both the assessees to plead against the appeal filed by the Revenue only a paperbook containing 92 pages has been filed. So far as the documents filed with regard to Dreamz Wealth Consultancy Pvt. Ltd. and Dreamz Pbc Web Length Pvt. Ltd. since we have already confirmed the action of ld. CIT(A) there remains no need to examine these documents. 15. So far as the remaining two concerns M/s. Blossom Vinimay Pvt. Ltd. and M/s. Baliraja Distributors Pvt. Ltd., we notice that the assessee has filed the income tax return and audited financial statement for FY 2011-12. From going through the audited profit and loss account of M/s. Blossom Vinimay Pvt. Ltd., we notice that revenue from operation is NIL during the FY 2011-12 and was NIL in the immediately preceding financial year. There is no transaction except other income for FY 2011-12 and other expense of Rs. 30,787/-. Neither there is any regular business activity nor any fixed assets are appearing in the balance sheet. Moving on the financial statements of M/s. Baliraja Distributors Pvt. Ltd., we notice tha ..... 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