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TMI Blog2024 (5) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... l presence of the directors of the shareholders before the Assessing Officer. Assessee has rightly placed reliance upon the decision of Paradise Inland Shipping Pvt. Ltd. [ 2017 (11) TMI 1554 - BOMBAY HIGH COURT] as held that once the assessee has produced documentary evidence to establish the existence of the subscriber companies, the burden would shift on the revenue to establish their case. Thus no justification on the part of the lower authorities in making the impugned additions and the same are accordingly ordered to be deleted. Decided in favour of assessee. - Shri Sanjay Garg, Judicial Member And Dr. Manish Borad, Accountant Member For the Appellant : Shri Giridhar Dhelia, Advocate For the Respondent : Shri Abhijit Kundu, CIT-DR ORDER PER SANJAY GARG, JUDICIAL MEMBER: The present appeal has been preferred by the assessee against the order dated 26.10.2023 of the National Faceless Appeal Centre [hereinafter referred to as CIT(A) ] passed u/s 250 of the Income Tax Act (hereinafter referred to as the Act ). 2. The assessee in this appeal has taken the following grounds of appeal: 1) For that the learned CIT (Appeals) erred in confirming the addition of Rs. 12,25,33,500/-asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaking order and in a mechanical manner. That the assessee had duly furnished all the details such as ITRs, PANs, copies of audited financial statement for the A.Y 2012-13, copies of bank statement of the allottee companies, copy of Form 5 along with receipt filed with ROC, details of source of funds relating to the identity and creditworthiness of the creditors and genuineness of the transaction. Apart from that, it was submitted that the identity of the share subscriber was duly proved, transactions were carried out through banking channel, the source of funds of the share subscriber was duly furnished. He has further submitted that the subscribing companies were having adequate reserves and surpluses to invest in the assessee company. Further, that all these subscribers were income tax assessee s and further that all the investor companies were duly incorporated with the Registrar of Companies. That there were no paper companies involved in the transactions. The Ld. Counsel has further contended that the Assessing Officer, instead of examining all the relevant documents, insisted for the personal presence of the directors of the subscribers and did not point out any defect, disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully verifiable. The ld. counsel further pointing out to the concluding para of the ld. CIT(A) has submitted that the ld. CIT(A) has dismissed the appeal in a mechanical manner with a two-line observation, On this issue, the remand report from the A.O was called and these documents were sent to him for his comments. The Ld. A.O adhered to his earlier views. The addition made by the Ld. A.O is confirmed and grounds of appellant are dismissed. The ld. counsel, therefore, has pleaded that the impugned additions were not sustainable in the eyes of law and the same may be set aside. 5. The ld. DR, on the other hand, has relied upon the findings of the lower authorities. 6. We have heard the rival contentions and gone through the record. We find that the only contention raised by the lower authorities is that the director of the subscriber company did not appear in response to the summons issued u/s 131 of the Act. The ld. counsel, in this respect, has submitted that the directors of the share subscriber companies though had shown their inability to appear personally on the date fixed, however, he had duly responded to the summons issued and sent the required details and evidences to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee solely on this ground as it is not under control of the assessee to compel the personal presence of the directors of the shareholders before the Assessing Officer. The Ld. Counsel for the assessee has rightly placed reliance upon the decision of the Hon ble Bombay High Court in the case of PCIT, Panji vs. Paradise Inland Shipping Pvt. Ltd. reported in (2017) 84 taxman.com 58 (Bom) wherein the Hon ble High Court has held that once the assessee has produced documentary evidence to establish the existence of the subscriber companies, the burden would shift on the revenue to establish their case. Further the jurisdictional Calcutta High Court in the case of Crystal networks (P) Ltd. vs CIT reported in [2013] 35 taxmann.com 432 (Calcutta) has held as under: We find considerable force of the submissions of the learned counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter creditworthiness. As rightly pointed out by the learned counsel that the CIT(Appeals) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nders. iii. If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit-worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated by Section 68 of the Act. The Hon ble Supreme court, thus, has held that once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness of the subscribers, then the AO is duty bound conduct to conduct an independent enquiry to verify the same. However, as noted above, the Assessing Officer in this case has not made any independent enquiry to verify the genuineness of the transactions. The assessee having furnished all the details and documents before the Assessing Officer and the Assessing Officer has not pointed out any discrepancy or insufficiency in the said evidences and details furnished by the assessee before him. As observed above, the assessee having discharged initial burden upon him to furnish the evidences to prove the identity and creditworthiness of the share subscribers and genuineness of the transaction, the burden shif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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