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TMI Blog2024 (9) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent: Mr. Gaurav Jain and Mr. Shubham Gupta, Advocates ORDER CM APPL. 313/2024 (5 days delay) in ITA 10/2024 M APPL. 350/2024 (5 days delay) in ITA 12/2024 Bearing in mind the disclosures made in the applications, they are allowed. Delay of 5 days in filing the appeals is condoned. Applications stand disposed of. ITA 1/2024, ITA 10/2024 and ITA 12/2024 1. The Principal Commissioner of Income Tax PCIT impugns the validity of the order dated 16 May 2023 passed by the Income Tax Appellate Tribunal (Tribunal) and posits the following questions of law for our consideration:- A. Whether on the facts and circumstances of the case the Ld. ITAT has erred in deleting the addition of Rs.5,62,00,000/- made by AO on account of unexplained share capital and share premium under Section 68 of the Act? B. Whether on the facts and circumstances of the case, the Ld. ITAT is correct in ignoring the fact that assessee has directly or indirectly received share capital and premium from entities/persons not having creditworthiness to provide such huge amount of unsecured loans? C. Whether the Ld. ITAT has erred in holding that share capital/premium received was explained ignoring the judgments in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. and M/s Indo Gulf Infrastructure Investment Pvt. Ltd. were made from undisclosed sources, the findings as returned by the Income Tax Appellate Tribunal [ ITAT ] and which has affirmed the view taken by the Commissioner of Income Tax (Appeals) would not sustain. Matter requires consideration. 3. Let the appeal be called again on 06.05.2024. 3. The aforesaid issue arose in the context of the Tribunal while dealing with the additions under Section 68 of the Income Tax Act, 1961 Act, having observed as follows:- 7. We have considered rival submissions in the light of decisions relied upon and perused the materials on record. Undisputedly, the dispute in the aforesaid three assessment years relates to addition of investments made on account of share capital and share premium by two entities with the assessee company. On a careful reading of the assessment orders, it is very much clear that the sole basis for the additions made u/s. 68 of the Act at the hands of the assessee company is the statement recorded from one, Mr. Praveen Kumar Shastri, stated to be the director of Kandhari group of companies. On a perusal of the observations made by the Assessing Officer in the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare capital, it cannot lead to the conclusions drawn by the AO. No specific corroborative evidence has been brought on record by Assessing Officer to prove that the equity subscription is an accommodation entry. Besides, appellant has also discharged its onus and submitted all the documentary evidence in respect of the investment. The details submitted in this regard by the appellant have also been made part of order by Assessing officer. It is also undisputed fact that the director of the appellant companies have never made any statement regarding the share capital / share premium / share application money and no disclosure have been made with regard to share capital / share premium / share application money / unsecured loan. As such, the addition made by the Assessing officer is unsustainable on the various legal grounds and on facts of the case. The addition made in the case of the appellant is deleted. Therefore, ground no. 3 is allowed. However, it has been pointed out to us that the unexplained money which formed the corpus of the share application already stood taxed in the hands of M/s Indogulf Infrastructure Investment Pvt. Ltd. and M/s MSG Finance India Pvt. Ltd. This be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with these companies lay M/s Indogulf Infrastructure Investment Pvt. Ltd and M/s MSG Finance India Pvt. Ltd? Ans. I have gone through the income tax returns and accounts of these two companies of last seven years along with Sh. Varinder Pal Singh Kandhari and I accept that, a part of share premium received by M/s Indogulf Infrastructure Investment Pvt. Ltd and M/s MSG Finance India Pvt. Ltd is own unexplained income from undisclosed sources of these two companies introduced in the names of other entities. After considering all the affairs and account of these two companies with due diligence. I accept and come in open with clean hands before the Income Tax Department that share premium of Rs.8,63,36,000/- introduced in the books of accounts of M/s Indogulf Infrastructure Investment Pvt. Ltd in F.Y. 2008-09 and share premium of Rs. 3,50,00,000/- introduced by M/s MSG Finance India Pvt. Ltd in F.Y. 2010-11 cannot be explained. I am unable to explain the source of above mentioned two amounts totalling to Rs. 12,13,36,000/- (8,63,36,000+3,50,00,000) in words Rs. Twelve crore thirteen lakh and thirty six thousand only. To buy peace of mind and avoid litigation I hereby offer a sum of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nia v. Commissioner of Income Tax, UP, AIR 1969 SC 501, the Hon ble Supreme Court reiterated the fundamental principle of law of taxation that unless otherwise expressly provided, income cannot be taxed twice; and that it is not open to the Income Tax Officer, if income has accrued to the assessee and is liable to be included in the total income of a particular year, to ignore the accrual and thereafter to tax it as an income of another year on the basis of receipt. 17. In the case of Commissioner of Income Tax IV v. Sarjan Realities Ltd., 2010 SCC OnLine Guj 8298 also it was held that when the assessee had already paid tax on the interest income in the earlier years, no fault could be found in the impugned order of the Tribunal in holding that the assessee was entitled to write off the excess income shown in the earlier years, in as much as the same income cannot be taxed twice, once in the earlier years and again in the year under consideration. 18. In the case of CIT v. K. S. M Guruswamy Nadar and Sons, (1984) 149 ITR 127, it was held that when there are two separate additions, one on account of suppression of profit and another on account of cash credit, it is open to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al that under no circumstances, the same income would be subjected to tax twice . 21. In the case of Pr. CIT (Central) v. Krishan Kumar Modi, 2022:DHC:676-DB, also a coordinate bench of this court reiterated that same money cannot be taxed twice. 22. In the cases of Omaxe Limited v. DCIT, 2014:DHC:1985-DB, a Division Bench of this Court and Komal Kant Fakir Chand Sharma v. DCIT, (2019) SCC OnLine Guj 696, a Division Bench of the Gujarat High Court held that once Settlement Commission had completed proceedings, its order is conclusive vide Section 245I and reopening any proceeding in respect of matters covered in the said order would be barred, except to the extent that the revenue can seek remedy under Section 245D(6) read with Section 245D(7) of the Act. 23. To recapitulate, in the present case, the material on record reflects that the Assessing Officer throughout the proceedings placed heavy reliance on the statement of Shri Shekhar Aggarwal to the effect that the undisclosed income of Priya Gold Group of Companies was routed in the form of share capital of the respondents/assessee companies by way of accommodation entries from Kolkata based entry provider companies and such shar ..... 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