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TMI Blog2024 (3) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... covered under the provisions of Section 68 of the Act. We are inclined to hold that all the necessary documentary evidences have been placed on record which are sufficient enough to prove the identity and creditworthiness of the share subscribers and genuineness of the transaction and the assessee has successfully discharged its onus of explaining the source of alleged sum. Thus, we fail to find any infirmity in the finding of ld. CIT(A) deleting the impugned addition made u/s 68 - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... us transaction. 2. For that on the facts and in the circumstances of the case and in law, the Ld. NAFC is failed to appreciate the principle which has been laid down by the Hon'ble Supreme Court in the case of Pr.CIT(Central)-1, Kolkata vs NRA Iron & Steel Pvt. Ltd. (412 ITR 161) wherein it is suggested that the Assessing Officer is duty bound to investigate the creditworthiness of the creditor/subscriber, verify the identity of the subscribers and ascertain whether the transaction is genuine or these are bogus, entries of name lenders . In facts of the case, in spite of best efforts made by the assessing officer, he could not verify the same as there was no response from the companies to whom shares were allotted during the course of assessment proceedings. Thus, the decisions of the Ld. NAFC is erroneous in holding that the raised share capital was not the assessee's own income. 3. For that on the facts and in the circumstances of the case and in law, the Ld. NAFC has not appreciated the ratio of decision of Apex Court in the case of Pr.CIT(Central)-1, Kolkata vs NRA Iron & Steel Pvt. Ltd. (412 ITR 161) wherein it is suggested that " the assessee is under a legal obligation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned addition. 6. Aggrieved, the Revenue is now in appeal before this Tribunal. Ld. D/R submitted that the alleged share applicant companies are jama-kharchi and accommodation entry providers not having any regular business activity and are merely used as conduit for rotation of money in order to provide accommodation entries and thus, the alleged transaction is not genuine and the creditworthiness of the share applicant companies is not proved. 7. On the other hand, ld. Counsel for the assessee heavily relied on the finding of ld. CIT(A) and also took us through a paper book containing 109 pages providing details of each and every share applicant and the source of funds utilized for making investment in the assessee company. Reference was also made to the remand report issued by the AO. 8. We have heard rival contentions and perused the records placed before us. Addition u/s 68 of the Act at Rs. 2.45 Crore deleted by ld. CIT(A) is in challenge before us by the Revenue. The assessee which is a non-banking finance company registered with the Reserve Bank of India by Certificate No. N.05.06863 dated 20.07.2010 received share capital and share premium to the tune of Rs. 2.45 Cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification of statement of bank accounts in the case of investor companies reference of deposit of cash and immediate withdrawal/transfer was not found. • Investor companies maintained books of accounts and audited by CA. • Investor companies were registered companies and PAN holders. Documentary evidence of ITR filed for AY 2012-13 and report to ROC found enclosed in paper book. On circumstances as stated above no infirmity in the matter related to standard set for mode of financial transactions, Creditworthiness of investors, genuineness of transactions found." 9. We further, notice that when the AO in the remand proceeding was satisfied, based on the said report, ld. CIT(A) deleted the impugned addition observing as follows: "6.5. Ground 3 relates to addition made by the learned AO by addition of the entire share application money received as unaccounted cash credit under section 68 of the Income Tax Act. 6.6. The learned AO carried out addition of Rs. 2,45,00,000/- on account of unexplained cash credit. The appellant had received share premium of Rs. 2,45,00,000/- and in order to adjudicate the genuineness of transaction and creditworthiness of share applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uine companies which file return of income regularly. 6.15. The learned AO has established in the remand report that identity, creditworthiness and genuineness of the transaction on basis of information contained in the paper book has been verified. 6.16. In view of the above it is observed that the appellant has discharged its primary onus of substantiating the genuineness of the transaction. 6.17. Having regard to above the nature of transaction is very well established as share application money and therefore the same cannot be considered as unexplained cash credit as per section 68 of I.T. Act. Therefore the addition of Rs. 2,45,00,000/- carried out learned AO is deleted 6.18. Accordingly, Ground 3 of the appellant is allowed." 10. Going through the above finding of ld. CIT(A), considering the remand report given by the AO and also on perusal of the documents placed before us, we fail to find any infirmity in the finding of ld. CIT(A) who has examined the facts of the case in order to come to a conclusion that a genuine transaction of investment was carried out by the alleged share applicants in the equity of the assessee company and the identity of the share applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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