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TMI Blog2023 (11) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion drawn by the Ld. CIT(A). Besides, the mere non-production of share holders/directors of the assessee before the AO cannot be the reason for making the addition. We note that despite having filed all the evidences, no enquiry was done and the Ld. CIT(A) has simply affirmed the finding of the AO by holding that no identity and creditworthiness of the creditors could not be proved by the assessee by ignoring all the evidences placed before him. Case of the assessee is also squarely covered by the decisions of Crystal Networks (P) 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 un-served or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. Decided in favour of assessee. - SRI RAJPAL YADAV, VICE PRESIDENT AND SRI RAJESH KUMAR, ACCOUNTANT MEMBER For the Assessee : Sh. S.K. Pransukha, FCA. For the Department : Sh. Vijay Kumar, Addl. CIT. ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER: This appeal preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eas notice in the case of 4 subscribers could not be delivered and served. Thereafter the assessee was required to produce the directors of the subscriber companies on 05.12.2016 at 12:30 PM from whom the money was received. Thereafter the case was adjourned a couple of time. However, the assessee failed to produce anyone on the statutory dates. Thereafter, the AO issued notice u/s 131 of the Act to the directors/principal officer of the assessee company by e-mail as well as speed post directing for personal appearance on 09.11.2016. However, there was no compliance. Finally, a show cause notice was issued on 13.12.2016 as to why the money raised should not be treated as unexplained cash credit and added back to the income of the assessee. Finally, the AO added the said amount to the income of the assessee as unexplained share credit on the ground that the assessee has failed to prove identity, creditworthiness and the genuineness of the transaction. In the appellate proceedings Ld. CIT(A) also dismissed the appeal of the assessee. 5. After hearing the rival contentions and perusing the material on record including the two remand reports furnished by the AO and replies of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the authorities below has carried out any investigation looking into the matter. So far as the issue of share at a premium are concerned, we note that the same were issued on the basis of the valuation report by the technical expert. Under the circumstances we are not in a position to concur a conclusion drawn by the Ld. CIT(A). Besides, the mere non-production of share holders/directors of the assessee before the AO cannot be the reason for making the addition. We note that despite having filed all the evidences, no enquiry was done and the Ld. CIT(A) has simply affirmed the finding of the AO by holding that no identity and creditworthiness of the creditors could not be proved by the assessee by ignoring all the evidences placed before him. Under the circumstances, we are not in a position to sustain the order of Ld. CIT(A). We find support from the decision of Hon ble Supreme Court in the case of CIT vs. Orissa Corporation Ltd. in [1986] 159 ITR 78 (SC) in which the Hon ble Court has held as under: That in this case the respondent had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een 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 Income-tax 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 due care all the material facts and record its findings on all contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law. It is also ruled in the said judgment at page 465 that if the Tribunal does not discharge the duty in the manner as above then it shall be assumed the judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. 6.3. Similar ratio has been laid down by the Hon ble Mumbai High Court in the case of CIT Vs Orchid Industries (P) Ltd. reported in 397 ITR 136 (Bom) by holding that provisions of section 68 of the Act 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. 7. In the instant case before us also, the assessee has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but AO has not commente ..... X X X X Extracts X X X X X X X X Extracts X X X X
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