9911796707
TMI Blog2025 (3) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was required to examine the correctness of the factual findings recorded by the appellate authority and then recorded its views as to why it is not in agreement with the findings of the appellate authority. On reading of the impugned order it is seen that this aspect of the matter is conspicuously absent. The test of human probability was also applied and when done so it was held that high premium share defying logic. Thus, if the test of human probability is applied in the facts of the case on hand, it should have been established by the assessee as to why and for what reason the share subscription invested in shares of the assessee company at such huge premium despite the factual position being that the assessee company had no track record. Thus, we are of the view that tribunal did not go into all these aspects and proceeded to accept the case of the assessee solely by making certain observations with regard to the paper book which was filed by the assessee. Tribunal over-turning the order passed by the appellate authority was required to examine the correctness of the findings recorded by the appellate authority and then come to the conclusion why such findings ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT/67/2024 dated 23.4.2024, which is an earlier decision of Hon'ble High Court having a precedence value ? 5. Whether the learned Income Tax Appellate Tribunal has committed substantial error in law in ignoring the judicial principles laid down in the matter of Sumati Dayal v. CIT [1995] 214 ITR 801 [SC] ? 6. Whether the learned Income Tax Appellate Tribunal has committed substantial error in law in not taking cognizance of the judicial principles laid down in CIT vs. Durga Prasad More 1973 CTR [SC] 500 : [1971] 82 ITR 540 [SC] ? 7. Whether the learned Income Tax Appellate Tribunal has committed substantial error in law in giving the verdict in favour of the assessee where the case is covered by clause [h] of Exceptions laid down under para 3.1 of the CBDT Circular No.5/2024 vide F.No.279/Misc-142/2007-ITJ[Pt], Dated 15th of March, 2024 ? 8. Whether the order of the Learned Tribunal is perverse in not considering the issue of the present case ? 3. We have heard learned advocates on either side. 4. The issue which falls for consideration is whether the tribunal was justified in setting aside the order passed by the Commissioner of Income Tax (Appeals), National Face ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reason for investment in the company with no track record and that too with such huge premium was not clarified. Furthermore, the Assessing Officer has noted that due to noncompliance on the part of the assessee the details of the shareholders were not available and, hence, identity of the shareholders is questionable. If the identity of the creditors are not established, consequently, question of establishment of genuineness of the transaction or creditworthiness of the creditors did not and could not arise. Furthermore, the Assessing Officer observed that the case has to be judged in the light of preponderance of probability and non human behaviour from which it will be easily inferred that the entire transaction lacks substance. Furthermore, on facts the Assessing Officer noted that a company that has been recently incorporated without any proven track record does not in any way justify the hefty premium. Thus, on facts the Assessing Officer came to the conclusion that the receipt of share application money is only façade for conversion of unaccounted money and the non-appearance of the directors only strengthen on this point. Reference was made to the decision of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to prove not only the identity of the share applicant but also the creditworthiness of the share applicants and last but not the least the bona fide or genuineness of the share application money credited in the books of account. It was held that merely providing proof of identity and other relevant documents is not sufficient as creditworthiness of the share applicant and the genuineness of the transaction is also important. After noting the decision of the Hon'ble Supreme Court in PCIT vs. NRA Iron and Steel Pvt. Ltd. (2019) 412 ITR 161 (SC), CIT vs. Durga Prasad More, (1971) 82 ITR 540 (SC) and Sumati Dayal vs. CIT, (1995) 214 ITR 801 (SC) the appellate authority proceeded to examine the documents in the case of the share subscriber companies which are 21 in number. The appellate authority has discussed the factual aspect in respect of each such share subscribers. By way of an illustration, if we take up the case of Lucky Prime Financial Consultants Pvt.Ltd., the company was shown to be an existence from June, 2011 with an authorised share capital of Rs. 500000/- and paid up capital of Rs. 4,59,600/-, the subscriber company has collected share premium of Rs. 1.76 crores on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the share capital at par along with share premium and the creditworthiness and the genuineness of the transactions were not proved. Accordingly, the addition of Rs. 2,82,00,000/- was confirmed and the addition of Rs. 10,798/- was deleted. 7. The assessee carried the matter on appeal to the tribunal which was allowed the assessee's appeal by the impugned order when surprisingly the learned tribunal has not discussed or dealt with the correctness of the findings recorded by the appellate authority, which, in our view, was done after a detailed factual exercise. The learned tribunal has stated in paragraph 17 of the impugned order that on perusal of the paper book and document three factors have been proved by the assessee. This, in our view, is wholly inadequate and insufficient for the tribunal to set aside the order passed by the appellate authority. In other words, the tribunal was required to examine the correctness of the factual findings recorded by the appellate authority and then recorded its views as to why it is not in agreement with the findings of the appellate authority. On reading of the impugned order it is seen that this aspect of the matter is conspicuously absent. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
