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2017 (1) TMI 1785 - AT - Income TaxAddition on account of investment in share capital / premium of four different companies u/s 69A - Bogus share capital and share premium - addition of 2% commission attributed to this transaction - HELD THAT:- On lack of veracity of share capital/premium of a company it is the company and /or the shareholders in whose name shares are held have the onus to explain the same. The assessee who is neither a shareholder nor a Director of these companies cannot be deemed to be the owner of these shares just by a statement of the Chartered Accountant who has later on retracted the same. A company is an artificial juridical entity. It has a right of ownership. It can be sued and it can sue. For the wrong doings of a company, the company itself is responsible and it is only in rare circumstances that corporate veil can be pierced and the person behind a veil i.e. the Directors and shareholders can be made accountable for the wrong doing of the company. But a person who is neither shareholder nor a director of the company cannot be deemed to be the owner of the share capital of a company without bringing cogent material on record. No material has been brought on record to show that Settlement Commission in the case of Prime Ispat Ltd. has implicated or found the assessee liable for the share capital and share premium. In our considered opinion the statement of Shri Sunil Kumar Agrawal which has been duly retracted can by no stretch of imagination be a basis to hold that the assessee was owner of the share capital of these four companies. This presumption is not tenable under any Law be it the Income Tax Law or Company Law - There is no infirmity in the order of learned CIT(Appeals) in quashing the protective assessment of the share capital and share premium of these companies in the hands of the assessee. Admission of additional evidence by CIT-A - HELD THAT:- As regards the plea that learned CIT(Appeals) has erred in admitting the appeal against the order of protective assessment, we note that there is no specific submission by the Revenue in this regard. Learned counsel of the assessee in this regard has submitted that there is no bar to admit appeal challenging protective addition and that the appeal has been decided by the learned CIT(Appeals) as per the provision of Income-tax Act, 1961. We find ourselves in agreement with this submission and hence ground raised by the Revenue in this regard is also rejected. Addition on account of payment made through debit card - DR relied upon the orders of the AO and reiterated that the AO has not examined the additional evidence on merits - HELD THAT:- Upon careful consideration we find that the additional evidence in this regard has not been examined on merits by the AO. It is also not the case that the learned CIT(Appeals) has himself examined the veracity of the additional evidence. In these circumstances we deem it appropriate to remit the issue to the file of the AO. The AO shall examine the veracity of additional evidence and thereafter decide accordingly.
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