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TMI Blog2024 (4) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... so assessee has filed all the details/evidences/ information from his own source as well as from all the subscribers. In the present case before us the assessee has furnished all the evidences before the AO but the AO has failed to conduct any further enquiry into these details /evidences and merely relied on the theory of non production of directors of the subscribing companies by the assessee while issuing no summons u/s 131 or notices u/s 133(6) of the Act to the subscribers. Decided in favour of assessee. - Shri Rajesh Kumar, Accountant Member And Shri Sonjoy Sarma, Judicial Member For the Appellant : Shri Miraj D Shah, A.R For the Respondent : Shri B. K. Singh, JCIT, Sr. D.R ORDER PER RAJESH KUMAR, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A) ] dated 19.05.2023 for the AY 2012-13. 2. The only issue raised by the assessee is against the confirmation of addition of Rs. 1,98,00,000/- by the Ld. CIT(A) as made by the AO u/s 68 of the Act by treating the share capital/share premium received as unexplained. 3. Facts in brief are that the case of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment proceedings called upon the assessee to furnish the evidences relating to identity, creditworthiness of the investors and genuineness of the transactions. Besides the AO issued summon u/s 131 of the Act to the directors of the assessee directing to produce all the directors with certain information comprising proof of identity, voter card, passport, driving license, PAN, list of entities/ subscribers or director of the share holders, ITR, audited accounts, bank statement, source of funds etc. The assessee filed before the AO the share allotment chart, details of share applicants and share application, copies of its audited financial statement, ledger accounts, bank statement as well as all the evidences in respect of subscribers vide letter dated 15.01.2015 comprising copies of PANs, copies of audited accounts along with report, bank statements, audited accounts/ reports, certificates of incorporation, share application forms, share allotment letters, copies of share certificate, assessment orders u/s 143(3) of the Act(of five subscribers) , source of source certificates (of five subscribers) of the subscribers vide letter dated 15.01.2015. However there was no compli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has raised Rs. 18,00,000/- from three parties as stated hereinabove. The assessee has filed the necessary evidences comprising names, addresses, PANs, bank statements, ITRs, balance sheet, profit and loss accounts, share allotment letter, share application with bank statement besides filing the bank statements of the assessee thereby evidencing the receipt of amounts of from these investors. We note that the assessee is a trading in shares and textiles and all the subscribers were also trader in textiles. We also note that it s customary in the business of textiles to business dealings in cash and so deposit into the banks accounts out of sales proceeds is in the normal course of business. Therefore mere fact that the cash has been deposited in the bank accounts of the subscribers immediately one or two days before issuance of cheques in favour of the assessee will not perse prove that these transactions were non-genuine. We have also examined the evidences filed before us in respect of share subscriber companies. We note that these companies are in fact having business in textiles and their turnover justified the cash deposits. Therefore the reasoning given by authorities below w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these investors by filing all the requisite details comprising shares subscribed, ledger accounts, bank statements, explanation for source of funds, ITRs and audited financial statements and also assessment order framed u/s 143(3) in all the cases. The copy of these which are also placed before us at page 15 to 340 in the PB. We also note that the AO has issued summon u/s 131 to the directors of the assessee company to produce managing directors of the share subscribing companies which were not complied with and this is the sole reason for making the addition in the hands of the assessee. The AO has not pointed out any defect or deficiency in the evidences filed by the assessee as well as by the investors. The Ld. CIT(A) has allowed the appeal of the assessee after taking into account all the above facts and has given a detailed findings of fact that AO has not pointed out any defect in the evidences by the assessee as well as by the share subscribers and mainly harped on the non-production of managing directors of the share subscriber companies to make the addition. The Ld. CIT(A) has noted that the assessee has discharged its onus by filing all the details and evidences which we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es pursuant to the summons issued in our view is not important. The important is to prove as to whether the said cash credit was received as against the future sale of the product of the assessee or note. When it was found by the Ld. CIT(A) on fact having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact findings. Indeed the Tribunal did not really touch the aforesaid fact finding of the Ld. CIT(A) as rightly pointed out by the learned counsel. The Supreme Court has already stated as to what should be the duty of the learned Tribunal to decide in this situation. In the said judgment noted by us at page 463, the Supreme Court has observed as follows: The Income-Tax Appellate Tribunals performs a judicial function under the Indian Incometax Act. It is invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and records its findings on all the contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law. The Tribunal must, in deciding an appeal, consider with du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed to tax u/s 143(3) for AY 2005-06 by ITO, Ward-9(4), Kolkata by order dated 20.03.2007. Similarly Jewellock Trexim Pvt. Ltd. was assessed to tax for AY 2005-06 by the very same ITO, Ward- 9(3), Kolkata assessing the assessee. In the light of the above factual position which is not disputed by the revenue, it cannot be said that the identity of the share applicants remained not proved by the assessee. The decision of the Hon ble Allahabad High Court as well as ITAT, Kolkata Bench on which reliance was placed by the learned counsel for the assessee also supports the view that for non-production of directors of the investor company for examination by the AO it cannot be held that the identity of a limited company has not been established. For the reasons given above we uphold the order of Ld. CIT(A) and dismiss the appeal of the revenue. In the instant case before us also, the assesse has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but AO has not commented on these evidences filed by the assessee. The AO simply harped on the non production of managing directors of the share subscribing companies to mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Tribunal further noted that in spite of such being the factual position, the only reason for making the addition in the hands of the assessee the director of the assessee companydid not respond to the summons issued by the assessing officer under Section 131 of the Act. The correctness of this was also considered by the learned Tribunal and it was held that non appearance of the director cannot be made a ground for addition in the hands of the assessee under Section 68 of the Act when other evidence relating to the raising of share capital qua the share subscriber were available on record as furnished by the assessee and also cross verified by the assessing officer pursuant to the enquiry conducted in response to the notices issued under Section 133(6) of the Act. The learned Tribunal also referred to the decision of this Court in the case of Crystal Networks Pvt. Ltd. Vs. CIT. reported in 353 ITR 171 (CAL). Thus we find that there is no question of law much less substantial question of law arising for consideration in this appeal. Accordingly, the appeal fails and is dismissed. We therefore respectfully following the ratio laid down in the above decisions, set aside the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition in the hands of the assessee under Section 68 of the Act when other evidence relating to the raising of share capital qua the share subscriber were available on record as furnished by the assessee and also cross verified by the assessing officer pursuant to the enquiry conducted in response to the notices issued u/s 133(6) of the Act. The Learned Tribunal also referred to the decision of this Court in the case of Crystal Networks pvt. Ltd. vs. CIT reported in 353 ITR 171 (CAL). Thus we find that there is no question of law much less substantial question of law arising for consideration in this appeal. Accordingly, the appeal fails and is dismissed. Consequently, the application also stands dismissed. 5.2. In the present case before us the assessee has furnished all the evidences before the AO but the AO has failed to conduct any further enquiry into these details /evidences and merely relied on the theory of non production of directors of the subscribing companies by the assessee while issuing no summons u/s 131 or notices u/s 133(6) of the Act to the subscribers. Considering the facts of the case in the light of the above decisions of the co-ordinate benches and jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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