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2022 (11) TMI 815 - ITAT KOLKATAUnexplained cash credit u/s 68 - Bogus share capital and share premium - non compliance to summons issued u/s 131 of the Act or non appearance of the directors of the subscribing companies before the AO - HELD THAT:- Mere non-compliance to the summons cannot be the basis for making addition.On the issue of high premium, we note that issuing of shares at a premium is a business decision taken by the board of directors and the AO cannot dictate the assessee as to at what rate the shares are to be issued. Besides there are no provisions under the Act to assess the said issue of shares at a high premium as the amendment was brought out in the Section 56(2)(viib) by Finance Act, 2012 w.e.f 01.04.2013 and accordingly is effective from AY 2013-14. So far as non-compliance of summons u/s 131 is concerned the same cannot be the ground for making addition. We note that the assesse has received the amounts through account payee cheques and source of investments were fully explained and proved. We further note that the AO has made the addition that no compliance was made to the summons issued to the investors. In our considered view non compliance to summons issued u/s 131or non appearance of the directors of the subscribing companies before the AO can not be basis for making addition as the assessee has filed all the necessary documents before the authorities below proving the identities , creditworthiness of the investors and genuineness of the transactions. The case of the assessee is squarely covered by the decisions of Hon’ble Calcutta High Court in the case of Crystal Networks Pvt. Ltd. [2010 (7) TMI 841 - KOLKATA HIGH COURT], wherein it has held that where all the evidences were filed by the assessee proving the identity and creditworthiness of the loan transactions , the fact that summon issued were returned un-served or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. As the assessee has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but AO has not commented on these evidences filed by the assessee. Besides all the four investors have also furnished complete details/evidences before the AO which proved the identity , creditworthiness of investors and genuineness of the transactions. Under these facts and circumstances we are inclined to uphold the order of Ld. CIT(A) by dismissing the appeal of the revenue.
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