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TMI Blog2025 (1) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. We find that the CIT(A) conducted a detailed and reasoned analysis before deleting the addition u/s 68. The assessee provided sufficient evidence to prove the identity, genuineness, and creditworthiness of the investor, while the AO failed to disprove the evidence or bring any material to justify the addition. The addition made by the AO appears to be based on assumptions and lacks substantive basis. Accordingly, the appeal filed by the revenue is dismissed. - Ms. Suchitra Kamble, Judicial Member And Shri Makarand V. Mahadeokar, Accountant Member For the Assessee : Shri M. S. Chhajed, AR For the Revenue : Shri Rignesh Das, Sr.DR ORDER PER MAKARAND V. MAHADEOKAR, AM: The present appeal by the revenue is directed against the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reassessment proceedings, the AO noted that the assessee company issued 1,00,000 shares at a premium of Rs. 490/- per share (face value of Rs. 10/-). The assessee received Rs. 2.75 crores as call money against the share application money from Mr. Bhavik Suryakant Parikh. In the subsequent financial year (A.Y. 2012-13), the assessee recorded the forfeiture of the share application money. The forfeiture occurred because Mr. Bhavik Parikh failed to pay the remaining balance required for the allotment of shares. The forfeited amount was treated as capital reserve in the books of the assessee, as per the applicable accounting standards. This forfeiture was one of the key factors that prompted the AO to scrutinize the initial receipt of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. The CIT(A) found that the investor appeared before the AO on 26/12/2016 and submitted his bank statement, ITR acknowledgment, and other documents. The AO did not record a formal statement and made no corresponding order sheet entry. The CIT(A) issued a letter dated 13/02/2018, requesting a report from the AO regarding these facts, but no response was received. The CIT(A) observed that the summons was served at the investor s address, and he filed a letter before the AO on 21/12/2016, furnishing his bank statement and ITR, facts that the AO omitted in his assessment order. The CIT(A) observed that the assessee had discharged its onus under Section 68 by providing Proof of identity (PAN details, address, and ITR of Mr. Parikh), evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of reasons to suspect. 3. Reopening of assessment is bad and illegal as the reasons for reopening of assessment are recorded by Ld AO subsequent to the approval granted by the Ld JCIT u/s. 151 of the Act. 4. Appellant craves liberty to add, modify, amend or alter any grounds of appeal before final hearing. 6. During the course of hearing before us, the Departmental Representative (DR) contended that the CIT(A) failed to seek a remand report during the faceless appeal proceedings, depriving the AO of an opportunity to defend his order. The DR argued that the documents were submitted late during the assessment proceedings, restricting the AO s ability to verify the investor s financial capacity. 7. The Authorized Representative (AR) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee during the assessment constrained the AO s ability to conduct a thorough verification, particularly regarding the financial capacity of the investor, Mr. Bhavik Parikh. The AR, on the other hand, submitted that Mr. Parikh appeared before the AO in response to the summons and provided all necessary documents, including his bank statement, ITR acknowledgment, and ledger accounts. The AR emphasized that the AO failed to record Mr. Parikh s statement despite his physical appearance and instead proceeded with the addition based on assumptions. The AR further contended that the CIT(A), having co-terminus powers with the AO, was empowered to examine the evidence independently and adjudicate the matter on merit. 9.1. The CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her inquiries despite his physical appearance demonstrates procedural lapses. 9.5. The amended proviso to Section 68, requiring companies to explain the source of the source of the share applicant s funds, became applicable from 01/04/2013 and is not retrospective. The CIT(A) correctly applied the judgment in Gagandeep Infrastructure P. Ltd. [2017] 80 taxmann.com 272 (Bombay HC) and concluded that this proviso was inapplicable to A.Y. 2011- 12. 9.6. After considering the submissions and examining the records, we find that the CIT(A) conducted a detailed and reasoned analysis before deleting the addition under Section 68. The assessee provided sufficient evidence to prove the identity, genuineness, and creditworthiness of the investor, while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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