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TMI Blog2024 (7) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany itself was beyond understanding. CIT(A) has given a finding that the submissions given by the assessee during the appellate proceedings pointed towards the elaborate documentations filed by the assessee in relation to application of shares, allotment of shares, share certificates, payments by cheques and necessary papers/documents filed before the Registrar of the company. CIT(A) also noted that the assessee has provided a copies of bank statements, contract notes, delivery instructions to the broker that all the transactions were genuine however in his considered view of the matter, it is precisely this elaborate paperwork strengthen the issue long term capital gain which clearly has been schemed, preplanned and executed with malafide intelligence and precision. We find that the CIT(A) has completely gone out of track while recording the findings as in the present case issue involved is raising share capital / share premium by issuing equity shares and not of earning of long term capital gain by selling equity shares. There was a complete non-application of mind to the facts/evidences filed by the assessee as well as share subscribers as the CIT(A) has wrongly recorded a fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 6,55,000/- along with share premium of Rs. 1,89,95,000/- as unexplained cash credit as the assessee could not establish the identity, creditworthiness and genuineness of the share subscribers and even did not produce the director of the investor companies in spite of summon issue u/s 131 of the Act and added the same to the income of the assessee in the assessment framed u/s 144 of the Act dated 16.03.2015. 4. In the appellate proceedings, the Ld. CIT(A) affirmed the order of AO by citing the same reasons that though the assessee has furnished all the evidences before the appellate authority and the AO also carrying out independent verification of these transactions by issuing notice u/s 133(6) of the Act to the subscribing companies and also by issuing summon u/s 131 in compliance to which Ms. Sarita Giria, one of the directors of the subscribing companies appeared before the AO, however the statement was not recorded but eventually dismissed the appeal of the assessee on the ground that the assessee did not produce the requisite details as called for by the AO THEREBY overlooking all the evidences as filed by the assessee as well as by the share subscribers. 5. The Ld. A.R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces being filed by the assessee as well as by the subscribing companies before the AO. The Ld. A.R contended that both the authorities below instead of commenting on the evidences/proofs filed by the assessee as well as the subscribers, merely relied on the facts that they have common place of business and common directors and therefore these are shell companies thereby giving no substantive findings. The Ld. A.R also referred to the provision of Section 68 of the Act as stood during AY 2011-12 and submitted that provisions are applicable only where the sum was credited into books of account maintained by the assessee for any previous year and assessee offers no explanation about the nature and source or explanation offered by him, is not, in the opinion of AO satisfactory then the sum so credited may be charged to the income tax as income of the assessee of that previous year. The Ld. A.R submitted that in the instant case the assessee has offered sufficient explanation about the nature and source thereof by filing all the evidences as stated above and therefore the conclusion drawn by both the authorities below was wrong, misleading and contrary to the facts on record. The ld AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Durga Prasad More [1971] 82 ITR 540 (SC) iv) Sumati Dayal vs. CIT [1995] 214 ITR 801 (SC) The Ld. D.R therefore prayed that the order passed by the Ld. CIT(A) is very reasoned and speaking one and therefore the appeal of the assessee may kindly be dismissed. 7. After hearing the rival contentions and perusing the material on record, we find that the assessee during the year has raised share capital/share premium by issuing 65,500 equity shares at face value of Rs. 10/- each at a share premium of Rs. 290/- per share thereby collecting Rs. 1,96,50,000/- from three group companies who have common directors and place of businesses. We note that the AO during the course of assessment proceedings called for various information/explanation/details from the assessee which were duly furnished before the AO comprising names, addresses, PANs, audited balance sheets, bank statements and confirmations from the share subscribers. We also note that the AO has issued notice u/s 133(6) of the Act to all the three subscribers which were duly responded by them and details requested by the AO were duly furnished. Besides summons u/s 131 was also issued to the assessee calling upon the assessee to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) also noted that the assessee has provided a copies of bank statements, contract notes, delivery instructions to the broker that all the transactions were genuine however in his considered view of the matter, it is precisely this elaborate paperwork strengthen the issue long term capital gain which clearly has been schemed, preplanned and executed with malafide intelligence and precision. We find that the Ld. CIT(A) has completely gone out of track while recording the findings as in the present case issue involved is raising share capital / share premium by issuing equity shares and not of earning of long term capital gain by selling equity shares. Having considered the facts, we are of the view that there was a complete non-application of mind to the facts/evidences filed by the assessee as well as share subscribers as the Ld. CIT(A) has wrongly recorded a finding that the assessee has wrongly derived benefit by way of long term capital gain on sale of equity shares which is totally wrong and based on conjectures, surmises and day dreaming . Considering all these facts and circumstances, we are not in a position to sustain the findings given by the Ld. CIT(A). Accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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