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TMI Blog2024 (11) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... iness prerogative as held in the Coordinate Mumbai Bench of the Tribunal in the case of M/s Greek Infra Ltd. [ 2013 (12) TMI 949 - ITAT MUMBAI] and in the case of Trident Shelters Pvt. Ltd. [ 2014 (1) TMI 1224 - ITAT HYDERABAD] That revenue cannot question the quantum of share premium in the absence of evidence of collusion or mala fide intent. We hold that the addition made by the AO as unexplained cash credit u/s 68 of the Act is unsustainable since the assessee has sufficiently established the identity, creditworthiness and genuineness of the transaction relating to the share capital received during the relevant financial year. We, therefore, direct the Assessing Officer to delete the addition u/s 68 - Appeal of the assessee is allowed. - Dr. Manish Borad, Accountant Member And Shri Sonjoy Sarma, Judicial Member For the Appellant : Shri Siddharth Agarwal, Advocate For the Respondent : Shri Pradip Biswas, Addl. CIT- Sr. DR ORDER PER SONJOY SARMA, JUDICIAL MEMBER: The present appeal is filed by the assessee against the order dated 13.05.2024 of the National Faceless Appeal Centre [hereinafter referred to as CIT(A) ] passed u/s 250 of the Income Tax Act (hereinafter referred to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Income Tax relying on the judicial precedents including the decision of Coordinate Hyderabad Bench of the Tribunal in ITA No. 1160/Hyd/2012 in the case of ITO vs. M/s. Trident Shelters Pvt. Ltd. and the decision of Coordinate Mumbai Bench of the Tribunal in the case of Green Infra Ltd. vs. ITO reported in 145 ITR 240(Mum). The ld. AR argued that the shareholders were subjected to tax scrutiny u/s 143(3) and 147 of the Act in the previous assessment year and the Assessing Officer could not dispute identity and creditworthiness of these shareholders. Non-appearance of the directors of the company could not be the sole ground to justify for treating the share application money as undisclosed income in the hands of the assessee. Reliance in this respect has been placed on the following decisions: 1. Decision of Hon ble Jurisdictional Calcutta High Court in the case of CIT vs. M/s Sagum Commercial Pvt. Ltd. in ITA No.54 of 2001, wherein, the High Court held that merely because shareholders not produced, no adverse inference can be drawn when PAN no., other details submitted. 2. ITAT, Mumbai Bench s order in the case of M/s Alcon Biosciences (P) Ltd. in ITA No.1946/Mum/2016 dated 28. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the other hand, the ld. DR argued that non-compliance of directors under summons suggest a lack of transparency raising doubt about genuineness of the transaction. Since, the identity, creditworthiness and genuineness of the transactions were not satisfactorily demonstrated, the Assessing Officer was justified in adding the share capital received and treating the unexplained cash credit u/s 68 of the Act. The ld. DR argued that the case laws cited by the ld. AR were factually distinct rendering them inapplicable to the present case. 6. We, after hearing the rival submissions of the parties and perusing the materials available on record, find that the contention raised by lower authorities is that the director of the subscriber companies did not appear in response to the summons issued u/s 131 of the Act. On this aspect, the ld. counsel has submitted that the directors of the share subscriber companies though have shown inability to appear personally on the date fixed, however, they had duly responded to the summons issued and sent the requisite details and evidences to the Assessing Officer. The Assessing Officer has not pointed out in the Assessment Order as to what further enqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal) on fact having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact finding. 7. So far as the reliance of the Ld. DR on the decision of the hon ble Supreme Court in the case of PCIT v/s NRA Iron Steel (P) Ltd. (supra) has taken note of the observations made by the Supreme Court in the the land mark case of Kale Khan Mohammed Hanif v. CIT [1963] 50 ITR 1 (SC) and Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC) laid down that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness, then the AO must conduct an inquiry, and call for more details before invoking Section 68. If the Assessee is not able to provide a satisfactory explanation of the nature and source, of the investments made, it is open to the Revenue to hold that it is the income of the assessee, and there would be no further burden on the revenue to show that the income is from any particular source. Thereafter the hon ble Supreme court summed up the principles w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) are co-terminus with the Assessing Officer and the ld. CIT(A) had all the plenary powers as that of the AO. The Hon ble Delhi High Court in the case of Commissioner of Income-tax vs. Manish Build Well (P.) Ltd. reported in [2011] 16 taxmann.com 27 (Delhi) has held that the CIT(A) is statutory first appellate authority and has independent power of calling for information and examination of evidences and possesses co-terminus power of assessment apart from appellate powers. However, a perusal of the impugned order of the ld. CIT(A) shows that the ld. CIT(A) has not discussed anything about the material facts of the case. He has not pointed out any defect and discrepancy in the evidences and details furnished by the assessee but simply upheld the order of the Assessing Officer in mechanical manner. The order of the ld. CIT(A) is a nonspeaking order. The same is not sustainable as per law. In this case, the assessee has provided detailed evidences to establish identity and creditworthiness and genuineness of the transaction in the shape of bank statements, acknowledgement of Income Tax Returns and transaction evidencing for each of the shareholders at the time of framing of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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