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TMI Blog2024 (6) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... directors of the investing companies even then the AO cannot make addition on the sole basis of non compliance. The case of the assessee is also squarely covered by the decisions of Crystal Networks Pvt. Ltd. [ 2010 (7) TMI 841 - KOLKATA HIGH COURT] wherein it has held that where all the evidences were filed by the assessee proving the identity and creditworthiness of the loan transactions , the fact that summon issued were returned unserved or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. Similar ratio has been laid down in the case of CIT Vs Orchid Industries (P) Ltd [ 2017 (7) TMI 613 - BOMBAY HIGH COURT] by holding that provisions of section 68 cannot be invoked for the reasons that the person has not appeared before the AO where the assessee had produced on records documents to establish genuineness of the party such as PAN, financial and bank statements showing share application money. Decided in favour of assessee. - Shri Rajesh Kumar, Accountant Member And Shri Sonjoy Sarma, Judicial Member For the Appellant : Shri S. K. Pransukha, FCA For the Respondent : Shri Abhijit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Sumati Dayal vs. CIT [1995] 214 ITR 801 (SC) held that revenue authorities are also supposed to consider the surrounding circumstances and apply the test of human probability. The AO held that there was no reason in issuing shares at a high premium. Finally the AO treated the share capital/share premium of Rs. 1,66,16,400/- as unexplained cash credit and added the same u/s 68 of the Act. 5. In the appellate proceedings, the Ld. CIT(A) dismissed the appeal of the assessee on the ground that these companies are fictitious company and have hardly any profit. The Ld. CIT(A) though recorded a finding that the identity and genuineness of the transaction were proved by the beneficiaries. The Ld. CIT(A) also noted that the finding of AO in para 7.2.2 that the director of the assessee company as well as the investing company failed to appear before the AO and therefore the condition as envisaged u/s 68 of the act could not be satisfied. 6. After hearing the rival contentions and perusing the material on record, the undisputed facts before us are that the assessee has raised share capital of Rs. 1,43,66,400/- and share premium of Rs. 22,50,000/- by issuing equity shares. We note t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no effort made to pursue the so-called alleged creditors. In those circumstances, the respondent could not do anything further. In the premises, if the Tribunal came to the conclusion that the respondent had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. I f the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such arose. The High Court was right in refusing to state a case. 6.1 The case of the assessee is also squarely covered by the decisions of Hon ble Calcutta High Court in the case of Crystal Networks Pvt. Ltd. vs. CIT ( 353 ITR 171 (Cal) wherein it has held that where all the evidences were filed by the assessee proving the identity and creditworthiness of the loan transactions , the fact that summon issued were returned unserved or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. The relevant portion of the decision is extracted below: We find considerable force of the submissions of the learned Counsel for the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to up set the fact finding of the Ld. CIT(A) that there are materials to show the cash credit was received from various persons and supply as against cash credit also made. Hence, the judgment and order of the Tribunal is not sustainable. Accordingly, the same is set aside. We restore the judgment and order of the Ld. CIT(A). The appeal is allowed. 6.2. The case of is also covered by the decision of the coordinate bench in ITO Vs M/s Cygnus Developers India Pvt. Ltd. ( (ITA No. 282/Kol/2012) ) the operative part whereof is extracted below: 8. We have heard the submissions of the learned D.R, who relied on the order of AO. The learned counsel for the assessee relied on the order of Ld. CIT(A) and further drew our attention to the decision of Hon ble Allahabad High Court in the case of CIT vs. Raj Kumar Agarwal vide ITA No. 179/2008 dated 17.11.2009 wherein the Hon ble Allahabad High Court took a view that non-production of the director of a Public Limited Company which is regularly assessed to Income tax having PAN, on the ground that the identity of the investor is not proved cannot be sustained. Attention was also to the similar ruling of the ITAT Kolkata bench in the case of IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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