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TMI Blog2019 (7) TMI 1996X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee. Revenue has invoked the provisions of Section 115BBE - We find that the section has been amended w.e.f. 01.04.2017 which is prospective and hence not applicable to the year in question before us. Since, the additions have been deleted the applicability of the section to the case would be superfluous. Appeal of the Revenue is dismissed. - Sh. H. S. Sidhu, Judicial Member Dr. B. R. R. Kumar, Accountant Member For the Assessee : Sh. Raj Kumar Gupta, CA For the Revenue : Ms. Ashima Neb, Sr. DR ORDER Per Dr. B. R. R. Kumar, Accountant Member: The assessee has raised following grounds of appeal: 1. That under the facts and circumstances and in view of the evidences placed on record, both the lower authorities erred in law as well as on merits by making an addition of Rs.1,00,00,000/- u/s.68 for unsecured loans taken from following 02 parties:- M/s Awasthi Medi Equipments (P) Ltd. Rs.45,00,000/- M/s Regal Infotech (P) Ltd. Rs.55.00,000/- Total Rs.1,00,00,000/- 1.1 That without pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.10.56 lakhs. Hence, he argued that keeping in view the business activities in the profits, the company cannot be treated as bogus and dummy company and since all the details have been filed as required by the Assessing Officer in order to prove identity, genuineness and creditworthiness the loan amount cannot be added to income u/s 68 of the Act. With regard to the loan received from M/s Regal Infotech Pvt. Ltd., it was argued that the amount received by the assessee is interest bearing @ 8% and the assessee has paid interest of Rs.1,04,548/- and also deposited TDS of Rs.10,455/- and hence, it cannot be treated as unexplained. 4. Regarding the M/s Regal Infotech Pvt. Ltd., it was argued that the loan received is interest bearing @ 8% and the assessee paid interest of Rs.376,219/- and deducted TDS of Rs.32,622/- thereon. It was argued that the summons were sent to wrong address and hence could not be served and the same cannot be treated as non-existing entity in view of non-service of summons. 5. The ld. DR, in addition to relying on the orders of the lower authorities argued based on the order of the Co-ordinate Bench of ITAT in the case of Synergy Finlease Pvt. Ltd. in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court held that where assessee, a private limited company, sold its shares to unrelated parties at a huge premium and thereupon within short span of time those shares were purchased back even at a loss, share transactions in question were to be regarded as bogus and, thus, amount received from said transactions was to be added to assesee's taxable income under section 68 It was held as follows: 53. In contrast to the above judgments, in the present case, the Assessee is a private limited company and in the factual matrix, we have held that the Assessee has not been able to discharge the initial onus and has not been able to establish the identity, creditworthiness of the share applicants and the genuineness of the transaction. Though, in our considered opinion, none of the above judgments, referred to by the Assessee respondent, are applicable in the facts of the present case and in view of the findings recorded by us hereinabove. 54. In view of the above, we are of the view that the Assessee has not discharged the onus satisfactorily and the additions made by the Assessing Officer were justified and sustainable. 6. CIT Vs Navodaya Castle Pvt. Ltd T20141 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay High Court held that where assessee-company received certain amount as share capital from various shareholders, in view of fact that summons served to shareholders under section 131 were unserved with remark that addressees were not available, and, moreover, those shareholders were first time assessees and were not earning enough income to make deposits in question, impugned addition made by AO under sec. 68, was to be confirmed 8 Pratham Telecom India Pvt Ltd Vs DCIT (2018-TIOL-1983-HC-MUM-IT) (Copy Enclosed) where Hon ble Bombay High Court held that mere production of PAN numbers bank statements is sufficient enough to discharge the burden on taxpayer to escape the realms of Section 68 9. CIT Vs Nipun Builders Developers (P.) Ltd (30 taxmann.com 292. 214 Taxman 429, 350 ITR 407. 256 CTR 34) (Copy Enclosed) where Hon ble Delhi High Court held that where assessee failed to prove identity and capacity of subscriber companies to pay share application money, amount so received was liable to be taxed under section 68. It was held as follows: 12. A perusal of the order of the Tribunal shows that it has gone on the basis of the documents submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts the present case stands on a completely different footing from the case of Oasis Hospitalities (P.) Ltd. (supra). 42. In the light of the above discussion, we are unable to uphold the order of the Tribunal confirming the deletion of the addition of Rs. 1,18,50,000 made under section 68 of the Act as well as the consequential addition of Rs. 2,96,250. We accordingly answer the substantial questions of law in the negative and in favour of the department. The assessee shall pay costs which we assess at Rs. 30,000/-. 11 CIT Vs Ultra Modern Exports (P.) Ltd (40 taxmann.com 458, 220 Taxman 165) (Copy Enclosed) where Hon ble Delhi High Court held that where in order to ascertain genuineness of assessee's claim relating to receipt of share application money, Assessing Officer sent notices to share applicants which returned unserved, however, assessee still managed to secure documents such as their income tax returns as well as bank account particulars, in such circumstances, Assessing Officer was justified in drawing adverse inference and adding amount in question to assessee's taxable income under section 68. It was held as follows: 9. As noticed prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Copy Enclosed) where Hon ble Delhi High Court held that if AO doubts the documents produced by assessee, the onus shifts on assessee to further substantiate the facts or produce the share applicant in proceeding. It was held as follows: 30. What we perceive and regard as correct position of law is that the court or tribunal should be convinced about the identity, creditworthiness and genuineness of the transaction. The onus to prove the three factum is on the assessee as the facts are within the assessee's knowledge. Mere production of incorporation details, PAN Nos. or the fact that third persons or company had filed income tax details in case of a private limited company may not be sufficient when surrounding and attending facts predicate a cover up. These facts indicate and reflect proper paper work or documentation but genuineness, creditworthiness, identity are deeper and obtrusive. Companies no doubt are artificial or juristic persons but they are soulless and are dependent upon the individuals behind them who run and manage the said companies. It is the persons behind the company who take the decisions, controls and manage them. 10 PCIT Vs Bikram Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected by the Revenue even to prima facie prove that the loan was bogus.. Hence, it cannot be treated as a fictitious loan. It is also a matter of record that the loan was also found to be repaid on 05.08.2017. 8. Regarding the loan received from M/s. Regal Infrastructure, we find that the assessee has paid interest of Rs.3,76,219/- and deducted TDS as per the Rules in-force. The lending company had a share capital of Rs.62,60,000/- and reserves in surplus of Rs.11.69 crores as on 31.03.2014. The company had gross revenues of Rs.19,81,107/- and returned income of Rs.2,88,486/-. Regarding the Inspector s enquiry, we find that the Inspector enquired at 62/11, Block-B, Phase-II, Narayana, New Delhi whereas the company has changed address to D-2, 46/10, Second Floor, Laxmi Nagar, New Delhi. The change of address was also duly informed to the Assessing Officer. 9. We find that the case laws relied by the Revenue grossly pertains to the situations wherein the share application given by various parties was not proved conclusively as to their identity, genuineness and creditworthiness of the transactions. The facts of the instant case are different and are distinguishable. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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