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TMI Blog2023 (5) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... e as to how these lands were acquired in terms of their conveyance deeds. In the written submissions furnished by assessee it is submitted that investment of assessee is in land and at the time of transactions and in view of huge quantity of land, cost of lands was very low but after the development of same, price of the same would be very high and profitable. As stated that assessee is valuing investments at books value, whereas, the intrinsic or fair market value is much more. While issuing shares, fair market value of the shares has to be taken into account and the person paying the premium has factually benefitted from the purchase of shares at premium. Assessee also submitted that in order to justify its fair market value had made an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the activity of land dealing claimed to have been undertaken by assessee during the year. Also, from perusal of financial statements of two share subscribing companies, it is observed that source of investment by these two companies are also from the share capital and share premium raised by them while issuing their own shares to other closely held companies. Further, the assessee itself has claimed that there is no noticeable business activity during the year. Thus assessee has failed to establish the basic ingredients of Section 68 of the Act - Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... come reporting total income at "Nil" on 29/03/2014. During the course of assessment, ld. Assessing Officer enquired about the equity share capital raised by the assessee for an amount of Rs. 3,66,00,000/-, comprising of share capital at Rs. 11,71,000/- and security premium of Rs. 3,54,29,000/-. Ld. Assessing Officer issued summons u/s 131 of the Act on the Director of the assessee to produce relevant documentary evidence and explanation/justification for the large share premium raised by the assessee. Ld. Assessing Officer noticed that there was no compliance from assessee by way of which identity, genuineness of the share subscribers and creditworthiness of the transactions can be established. The details of share capital raised during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditworthiness of share subscribers and the genuineness of the transactions. Ld. Assessing Officer completed the assessment by making an addition of Rs. 3,65,95,419/- as unexplained cash credit u/s 68 of the Act in respect of fresh amount of share application money along with premium raised during the year. Aggrieved assessee went in appeal before ld. CIT(A), who sustained the addition made by the Assessing Officer and dismissed the appeal. 6. Aggrieved, assessee is in appeal before the Tribunal. 7. Ld. Counsel for assessee furnished written submission containing five pages along with a compilation as annexure to the written submission to corroborate the transactions of share capital and share premium for which addition has been made. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indentures brokers, agents, assemblers, stockiest of goods and commodities of any kind to work as commission agents, brokers, contractors, processors order suppliers and dealing agents." 7.2. In the said main object clause of assessee, there is no reference to the activities of development of land or dealing in land as claimed by ld. Counsel in his submissions. The main object as stated above is in respect of dealing with merchandise and articles of all kinds but has no reference to dealing/development of land activities. Further, from details of share subscribers referred by ld. Counsel in the course of hearing and details of which are tabulated above, it was questioned as to why no premium was charged on the issue of shares to five indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Ld. Assessing Officer and tried to provide the fair market value of the investment held which proves the reasonableness of the premium, but ld. Assessing Officer was not interested to do so." Ongoing through these submissions, we find them to be general and vague in nature and in no way establishes the identity, creditworthiness of the share subscribers and the genuineness of the transaction. 8. It is difficult to comprehend the reason for the investment in the assessee company by the share subscribers when there is no track record for the assessee, this being the broken year and the very first year of incorporation. Preponderance of probabilities weighs in favour of Revenue when the fact on record is that shares have been issued on two ..... X X X X Extracts X X X X X X X X Extracts X X X X
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