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TMI Blog2023 (7) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer noticed that the assessee has received share premium as under: Sl. No. Name of the share applicant No. of shares Face Value per Premium Per share Total value of shares 1 Confiance Trading Pvt. Ltd. 59523 10 410 2,49,99,660 2 Monarch Infraprojects Pvt. Ltd. 59523 10 410 2,49,99,660 3 Khandelwal SRK Estate Pvt.Ltd. 19047 10 410 79,99,740 Total 1,38,093 5,79,99,060 5. After collecting the addresses of the share applicant companies, the Assessing Officer issued notices u/s 133(6) of the Act. Share applicants were asked to submit the following documents in support of the transactions: (a) Copy of the ledger amount of the assessee maintained by the share applicants. (b) Confirmation for any receipt/payment made to the assessee (c) Copies of letter/correspondence/communication made with the assessee (d) Copy of contract/agreement forming the basis for such deal (e) Whether any advertisement in any media was given by the assessee regarding issue of such shares at premium (f) How was the share premium decided (g) Who negotiated and signed the deal (h) Copy of Bank Statement for F. Y. 2011-12. (i) Copy of ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies. 11. The Assessing Officer was convinced that the share applicants failed to establish the credit worthiness and completed the assessment proceedings by making an addition of Rs. 5,79,99,060/- u/s 68 of the Act. 12. The assessee carried the matter before the ld. CIT(A) and reiterated its claim of genuineness of the transactions and supplied supporting documents once again. 13. After considering the facts and submissions and documentary evidences and after referring to various judicial decisions, the ld. CIT(A) was satisfied that the balance sheet of the share applicant companies revealed that they had sufficient source of funds to invest in the company and referred to the following chart: Sl.No. Name of the Share Applicant Share Capital as per Balance Sheet (Rs.) Reserves as per Balance sheet (Rs.) Total Investment (Rs.) Investment in the appellant company (Rs.) 1. M/s. Confiance 14,88,880/- 4,86,10,800/- 9,35,59,500/- 2,49,99,660/- 2. M/s. Monarch Infraprojects Pvt. Ltd. 26,00,000/- 4,74,94,870/- 5,02,99,500/- 2,49,99,660/- 3. M/s. Khandelwal SRK Estate Pvt. Ltd. 19,20,000 /- 3,20,80,000/- 4,87,34,540/- 79,99,740/ - 14. The ld. CIT(A) was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he law was discussed by a Division Bench of this Court in the case of Commissioner of Income Tax Vs. Divine Leasing and Finance Ltd. [299 ITR 268]. Since the entire gamut of case law as on that date was visited in the said judgment, we may initiate our discussion by taking note of this case. In this case, the Court highlighted the menace of conversion of unaccounted money through the masquerade or such channels of investment in the share capital of a company and thus stressed upon the duty of the Revenue to firmly curb the same. It was also observed that, in the process, the innocent assessee should not be unnecessary harassed. A delicate balance must be maintained. It was, thus, stressed: "15. There cannot be two opinions on the aspect that the pernicious practice of conversion of unaccounted money through the masquerade or channel of investment in the share capital of a company must be firmly excoriated by the Revenue. Equally, where the preponderance of evidence indicates absence of culpability and complexity of the assessed it should not be harassed by the Revenue's insistence that it should prove the negative. In the case of a public issue, the Company concerned cannot be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicated that the donor was to receive suitable compensation from the assessees. The AO held that the gifts though apparent were not real and accordingly treated all those amounts which were credited in the books of account of the assessee, as their income applying Section 68 of the Act. The assessee did not contend that even if their explanation was not satisfactory the amounts were not of the nature of income. The CIT (A) confirmed the assessment. On further appeal, there was a difference of opinion between the two Members of the Appellate Tribunal and the matter was referred to the Vice President who concurred with the findings and conclusions of the AO and the CIT (A). On appeal, the High Court reappreciated the evidence and substituted its own findings and came to the conclusion that the reasons assigned by the Tribunal were in the realm of surmises, conjecture and suspicion. On appeal to the Supreme Court, the Court while reversing the decision of the High Court held that the findings of the AO, CIT (A) and the Tribunal were based on the material on record and not on any conjectures and surmises. That the money came by way of bank cheques and was paid through the process of ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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