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TMI Blog2019 (4) TMI 2170X X X X Extracts X X X X X X X X Extracts X X X X ..... dition of Rs. 24,20,60,000/- under sec. 68 without properly appreciating the facts and evidences filed whereas no share were issued during the year either by the appellant company or the companies amalgamated with it. The increase in share premium was nothing but the addition of share premium account of the amalgamating companies with the corresponding figure of the appellant company. 3. For that in the circumstances of the case the Ld. CIT(A) erred in confirming the addition made U/s. 68 particularly when the initial onus were duly discharged by the assessee. 4. For that the Ld. CIT(A) erred in not considering the submissions made by the appellant on 09.08.2017. 3. The facts of the case which can be stated quite shortly are as follows: During the assessment year 2012-13, the share capital of the assessee company has increased due to scheme of amalgamation approved by Hon'ble Calcutta high court. The assessing officer made addition of Rs. 24,20,60,000/- under section 68 of the Income Tax Act, treating the unexplained cash credit of the share capital/premium increased in the Balance Sheet due to scheme of amalgamation. During the assessment proceedings, the assessee submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no cash receipt. The decisions in (i) Commissioner of Income Tax v. Focus Exports Pvt. Ltd., reported in (2014) 90 CCH 0105 (Delhi); (ii) Commissioner of Income Tax v. Globus Securities & Finance Pvt. Ltd., reported in (2014) 264 CTR 481 (Del h i) ; (iii) Onassis Axles Private Limited v . Commissioner of Income Tax, reported in (2014 ) 364 ITR 5 3 (Delhi) ; (i v) Olwin Tiles India (P) L td . v . Deputy Commissioner of Income Tax, reported in (2016) 382 ITR 291 (Gujarat) ; ( v) B . R . Petrochem Pvt. Ltd . v . The Income Tax Officer, (Order dated 24.4.2017 in T. C (A ) No. 1498 of 2007; and ( vi) Rajmandir Estates Private Limited v . Principal Commissioner of Income Tax, reported in (2016) 386 ITR 162(Calcutta), cited on behalf of the respondent are distinguishable, in that the cash credits towards share capital were admittedly only by way of book adjustment and not actual receipts which could not be substantiated as receipts towards share subscription money. 28. The appeal is, thus, allowed and the judgment and order of the learned Tribunal dated 1.9.2016 is set aside, for the reasons discussed above. Additions under section 68 of the 1961 Act are also set aside. The questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done in such case laws, which have evolved on this issue, call for concerted actions on the part of the AO pinpointing utilization of unexplained/unaccounted/untaxed money and the players and the beneficiaries effectively using the weblike scheme to plunder black money. For example, introduction and use of black money in the present case may be at a different point of time and in different hands. The AO's action in the present case cannot be upheld in law. I, therefore, delete the additions and grounds of appeal Nos. 3 & 4 are allowed." 4.1. We find that the Hon'ble Allahabad High Court in the case of CIT vs. Sohanlal Singhania reported in 235 ITR 616 (All) had held in the context of allowability of donation as deduction u/s 80G of the Act that the expression 'any sum paid' used in the said section denotes ' sum of money paid'. Hence if certain shares were donated by a person, then the same would not fall eligible for deduction u/s 80G of the Act. We also find that the Hon'ble Jurisdictional High Court in the case of Jatia Investment Company (Co.) vs. CIT reported in 206 ITR 718 (Cal) also supports the case of the assessee herein, wherein it was held as under: "It is finally em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He urged that the purported motive of the entries being the reduction of loans of the three limited companies does not explain the whole matter, because the entries are cash entries. The fact remains that, at every stage, the parties showed the payments and receipts of cash even when there was no cash available for such entries. This quite justifies the addition as sustained by the Tribunal. We have perused the assessment order carefully. We find that cash did not pass at any stage though entries were made in the cash book showing payments and receipts ; but since the entries made a complete round, no passing of cash was necessary for the purpose of making the entries. That there was no passing of cash is also admitted by the Income- tax Officer himself. We have already extracted the observation of the Income-tax Officer in paragraph 14 of his assessment order. The Income- tax Officer has clearly opined that all the respective parties did not receive cash nor did pay cash as none had any cash for the purpose. The only point in the assessment order is that the entries not involving the passing of cash should not have found a place in the cash book, but in the ledger account throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Pune Trib.) also supports the case of the assessee. 4.3. In view of the aforesaid observations, in the facts and circumstances of the case and respectfully following the aforesaid judicial precedents relied upon hereinabove, we hold that the ld. AO had erroneously invoked the provisions of section 68 of the Act to the facts of the instant case, which, in our considered opinion, are not at all applicable herein. This is a simple case of acquiring shares of certain companies from certain shareholders without paying any cash consideration and instead the consideration was settled through issuance of shares to the respective parties. Moreover, in the balance sheet of the assessee company in the schedule to share capital, it is very clearly mentioned by way of note that the fresh share capital was raised during the year for consideration other than cash. Hence we hold that provision of section 68 of the Act are not applicable in the instant case and accordingly the entire addition deserves to be deleted which has rightly been done by the ld. CIT(A) which does not require any interference. Accordingly, grounds raised by the revenue are dismissed ". 9. We note that Ld CIT(A), without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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