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TMI Blog2020 (9) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... by the CIT(A) which does not require any interference. Appeal of the Revenue is dismissed. - SHRI A. T. VARKEY, JM DR. A.L.SAINI, AM For the Appellant : Shri Ram Bilash Meena, CIT For the Respondent :ShriVinod Kr. Jain, FCA ORDER Per Dr. A.L. Saini, AM: The captioned appeal filed by the Revenue, pertaining to assessment year 2012-13, is directed against the order passed by the Commissioner of Income Tax (Appeal)-1, Kolkata, in appeal no. 18449/CIT(A)-1/Kol/Ward-1(3)/2015-16, dated 15.01.2019, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (in short the Act ) dated 25 /03/2015. 2. The grounds of appeal raised by the Revenue are as follows: 1) That on the facts and circumstances of the case and on Law Ld. CIT(A) has erred in granting relief to the assessee in respect of addition made u/s 68 of Rs.9,93,00,000/- by the AO for lack of explanation and for want of satisfaction, simultaneously, in respect of: i) Identity of the persons with whom transactions took place. ii) Genuineness of transactions for which credit entries entered in the books of Accounts. iii) Capacity of the persons or their creditworthiness fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions. At the outset, we find that the assessee had not raised any share capital by receipt of cash consideration in the instant case. The shares were issued for consideration other than cash in lieu of assessee company making investment in shares in some other company. Effectively, the assessee purchased certain shares from the aforesaid six shareholders and instead of paying cash to them, the assessee company issued shares in its own company to those shareholders. Hence the assessee had made investments in shares of another company for which consideration was settled through issuance of its shares to those shareholders. Now the crucial point is whether the provisions of section 68 could be invoked in the instant case for making investment towards share capital. There was no receipt of any sum as provided u/s 68 of the Act in the instant case. It would be pertinent here to refer to the decision of Hon ble Supreme Court in the case of Shri H.H. Rama Varma vs. CIT reported in 187 ITR 308 (SC) wherein it was held that any sum means sum of money . We find that ld. CIT(A) had deleted the addition by observing as under: 6. On consideration of the AR s submission, especially the portion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, i.e., Rs. 11.20 lakhs. Therefore, the question of cash credit does not come in, there being no actual passing or receipt of cash. In other words, the transactions are mere book entries. It was contended that the fact that the entries passed through the cash book could not detract from or efface the essential nature of the entries. It was also urged that the entries were passed through the cash book so that the repayment of loans by the said three companies could be established before the Reserve Bank of India. But, according to Shri Bajoria, that does not mean that it amounts to an artifice employed to deceive any authorities, because the transactions showing the amount as received in cash and paid away spontaneously and simultaneously were not actual but only notional. He, however, stated that, as far as the question of section 68 is concerned, the nature of the transactions and the entries clearly show that no cash, in fact, flowed. It was further stressed that the transactions are above board. No outsider is involved. The entries were made in the books of the concerns of the same group. The shares in question were also of the companies of the group. There was no attempt at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the Tribunal for disbelieving the assessee's case is that the adjustment entries were made by notional cash entries with a view to bringing down the debt-and-capital ratio, i.e., that while being discharged of the debt the said companies also jettisoned their assets, i.e., the shares held by them of equivalent sum without achieving the avowed purpose. Here the Tribunal certainly misdirected itself. The ratio to be reduced is of the loan in relation to the share capital and the reserves. Jettisoning the shares had the desired effect of reducing the borrowed capital . Again, as regards the Tribunal's refusal to take notice of the directions of the Reserve Bank, it is not correct for the Tribunal to hold that the said document was a new evidence in the true sense of the term. The assessee has been consistently pleading before the lower authorities that the entries had to be made in order to bring the companies in conformity with the said direction. Moreover, the direction of the Reserve Bank is a public document within the meaning of section 74 of the Evidence Act, 1872. Documents of a public nature and public authority are generally admissible in evidence subject to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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