TMI Blog2023 (9) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... of the replies filed by the investor companies in response to the queries raised by the AO, but had also placed before him the relevant documentary evidence. These submissions seem to have been taken by the Tribunal on their face value. Nothing has been shown to us which would demonstrate, firstly, that the directors of the investor companies had, in fact, appeared before the AO. Secondly, that replies had been furnished by the investor companies in response to the queries raised by the AO. As indicated right at the beginning of our narration, out of Rs. 45 crores invested in the respondent/assessee, Rs. 25,52,50,000/- was reinvested by the respondent/assessee in three (3) out of the five companies, i.e., in Shuklamber Exports Ltd., Sukaram Marketing Ltd. and Sheetal Exports Ltd.,i.e., nearly the entire amount was repaid. Tribunal somehow did not deem it fit to inquire as to why more than 50% of the amount raised by the respondent/assessee was invested by it in the three companies referred to hereinabove. Tribunal, as a matter of fact, did not inquire into the financials of investor companies and, therefore, according to us, the test of creditworthiness was also not met in this ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... karam Marketing Ltd, 5, Russel Street, Kolkata-700 071 1,56,50,000/- 14,08,50,000/- 15,65,00,000/- 5. Sheetal Exports Ltd, 9 Ezra Street, Kolkata, 700 001 1,56,50,000 14,08,50,000/- 15,65,00,000/- Total 4,50,00,000/- 40,50,00,000/- 45,00,00,000/- 2.3 As would be evident from the information extracted hereinabove, out of the five (5) companies, the first three (3) companies [listed at serial number 1 to 3] were located in Delhi, albeit at the same address, while the remaining three (3) companies were based in Kolkata. 3. The record also reveals that the respondent/assessee having received funds in the form of share capital and share premium, in turn invested in the share capital and share premium of three (3) out of five (5) companies. These companies were Shuklamber Exports Ltd. [serial number 1], Sukaram Marketing Ltd. [serial number 4] and Sheetal Exports Ltd [serial number 5]. The details concerning these investments made by the respondent/assessee are set out hereafter: S.No. Name/Address of Share Applicant No, of Shares Purchased Amount Invested 1. Shuklamber Exports Ltd, 10159, Padam Singh Road, Karol Bagh, New Delhi-110005 30,000 Rs 30,09,000/- 4. Sukaram Marketing Ltd, 5, R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order passed by the AO. It is important to note that, although, the CIT(A) concluded that the identity of the investors was established he was not persuaded to hold that the transaction was genuine and, accordingly, sustained the addition made by the AO. 8.1 This conclusion of the CIT(A) was pivoted on the fact that the respondent/assessee had failed to discharge the onus placed on it, which was, to explain the nature and source of credit found in its books of accounts. 9. It is against the aforesaid backdrop that the respondent/assessee carried the matter in appeal to the Tribunal. The Tribunal, strangely, made note of the following submissions advanced on behalf of the respondent/assessee without returning a finding of fact as to whether or not each one of them was borne out from the record : 6. The stand of the assessee all-through has been consistent. The ld. counsel for the assessee has brought to our attention the fact that all the five companies involved were existing assessees; that their PAN numbers and confirmations, bank statements and balance-sheet, etc., were produced on record duly before the AO. It is submitted that the observation of the AO, as confirmed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness or the existence of the identity of the investor companies, there is no reason why the addition should have been made. In the case of Stellar Investment, 251 ITR 263 (SC), the Hon ble Supreme Court upheld the order of the Hon ble High Court holding that even if it was to be assumed that subscribers increased share capital were not genuine, under no circumstances could the amount of share capital be regarded as the undisclosed income of the assessee. [Emphasis is ours] 11. In our view, the conclusion reached by the Tribunal that the respondent/assessee proved the nature and source of the investment made in its share capital and towards share premium, was founded, if not fully, substantially, on the submission made on behalf of the respondent/assessee that information sought via notices issued under Section 133(6) of the Act had been furnished and that although in response to the summons issued under Section 131 of the Act, the concerned persons had appeared before the AO, their statements were not recorded. 12. As is evident from paragraph 6 of the impugned order, the Tribunal went on to record that not only the respondent/assessee had furnished copies of the replies fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
