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TMI Blog2024 (1) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning of section 56(2)(vib) of the Income Tax Act but held that this provision is applicable from A.Y. 2013-14 and not in A.Y. 2012-13. On due consideration of the order of ld. CIT(Appeals), we are of the view that it does not call for any interference at our end. Accordingly, the appeal of the Revenue is dismissed on merit. - Shri Rajpal Yadav, Vice-President (KZ) And Shri Rajesh Kumar, Accountant Member For the Revenue : Shri B.K. Singh, JCIT, Sr. D.R. For the Assessee : Shri Ashok Tulsyan, A.R. ORDER PER RAJPAL YADAV, VICE-PRESIDENT (KZ):- The Revenue is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 25th March, 2023 passed for A.Y. 2012-13. 2. The Registry has pointed out that appeal of the Revenue is time barred by 40 days. In order to explain the delay, the ld. Assessing Officer has filed an application for condonation of delay. In his application, he submitted that orders of the ld. CIT(Appeals) are downloaded from the system of manual checking basis and during the period from January, 2023 to May, 2023, the Department was under pressure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company has been incurring loss year after year and, therefore, there was no justification at the end of the assessee to command such a premium from the market. On the strength of this belief, he held the transaction of the assessee as non-genuine and made the addition, with the help of section 68, treated this share application money as unexplained credit. 5. The ld. CIT(Appeals), on the other hand, did not concur with the ld. Assessing Officer and deleted the addition. The finding recorded by the ld. CIT(Appeals) reads as under:- 5.3. DECISION:- The order u/s 154/143(3), the ground of appeal, the statement of facts, and the submissions furnished by the appellant have been carefully considered. 5.3.1. The facts of the case are as mentioned in the above paras and need not be repeated again. Based on them, the following points emerge:- 1. All the 4 share applicant companies responded to notices u/s 133(6) vide their replies on 15.12.2014 with their documents to prove the genuineness of transaction. 2. Director of all the 4 share applicant companies personally appeared before the AO and their statements were recorded on oath u/s 131 of the Act. - thus the Ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is concerned, it is also true that the Proviso to Sec. 68 has been inserted w.e.f. 1.4.2013 i.e from AY 13-14. Hence the applicability of the provision for the relevant assessment year to the Appellant case is debatable. 8. In this context, the decision of the jurisdictional Kolkata Tribunal in [2023] 146 taxmann.com 406 (Kolkata - Trib.) BST Infratech Ltd. v. Deputy Commissioner of Income-tax. pronounced on 30,11.2022 is squarely applicable to the instant appeal. The relevant extract of the Tribunal order is reproduced as under:- 5. After considering the above details, which have also been reproduced in the impugned order of the CIT(A), we note that the Assessee has proved the identity of the share subscribers. The share applicants are the Group companies of the assessee company and they are body corporate, registered with the ROC and they were available at the given address. The share applicants have furnished copy of PAN and are registered with ROC having CIN. All the data's of such companies are available with Income-tax Department ROC. They are also assessed to Income-tax regularly. In respect of genuineness of the transaction the Id. Counsel has establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany, warranting addition under section 68 of the Income-tax Act. Even after making elaborate exercise of examining the documents, the Ld. CIT(A) could not point out any rebuttal to the above evidences furnished by the assessee to prove the identity, creditworthiness of the share subscribers and genuineness of the transaction. The hon'ble Jurisdictional Calcutta High Court, in the case of Pr. CIT v. Anmol Stainless (P.) Ltd. [2022] 138 taxmann.com 535 has held that that where it has been sufficiently established that share applicants had substantial creditworthiness and investments had been made by assessee's own sister concern/group companies having mostly common directors and thus, establishing creditworthiness and genuinity of investments, additions under section 68 had been rightly been deleted. In view of the discussions made above, we do not find justification on the part of lower authorities in making/confirming the impugned additions, the same are accordingly ordered to be deleted. In the result, the appeal of the assessee is, hereby, allowed. 1. The Appellant has also relied on the following case laws:- 1. CIT V. Apex Therm Packaging (P) Ltd. in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced for removal of doubts or that it is declaratory . Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming the pre-proviso Section 68 of the Act laid down by the Courts namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned order of the Tribunal and on facts it was found satisfied. Further it was a submission on behalf of the Revenue that such large amount of share premium gives rise to suspicion on the genuineness (identity) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl. No. Particulars Amount (Rs.) Amount Invested (Rs.) 1 Citizen Securities Pvt. Ltd. 3,91,29,175 25,00,000 2 De-Con Projects Pvt. Ltd. 6,89,96,701 50,00,000 3 Software Conglomerate Pvt. Ltd. 9,15,11,941 50,00,000 4 Quickpay Suppliers Pvt. Ltd. 2,77,71,945 1,75,00.000 7. During the course of hearing, it was pointed out that all these four companies are Group Company of the assessee. They filed positive return income every year though small in number. For instance first group Concern is Citizen Securities Pvt. Ltd., who has net worth of Rs. 3.91 crores and this Concern invested only Rs. 25 lakhs, i.e. less than 10% of its own net worth. The Directors of this Company appeared before the ld. Assessing Officer and deposed that the Company has made investment with the assessee-company and also paid share premium. Similarly the second company is De-Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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