9911796707
TMI Blog2015 (4) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... 500 7,42,500 8,25,000 3 Criticare marketing P. Ltd. 96,500 8,68,500 4,85,000 4 Ziwani Barter P. Ltd. 48,500 4,36,500 4,85,000 5 Devraaj Mercantile 80,000 7,20,000 8,00,000 6 Smt. Nirmala Bermecha 19,84,990 1,78,64,910 1,98,49,900 The assessee has shown receipt of Rs. 19,84,990/- towards share capital and Rs. 1,78,64,910/- towards share premium thus aggregating Rs. 1,98,49,900/- from Smt. Nirmal Barmecha. 4. By the order of Ld. CIT(A) deleting addition of Rs. 1,98,49,900/- after having following observations; 6. I have considered the facts of the case, the findings of the A.O. and the submission of the appellant. There is no doubt that sums totaling Rs. 1,98,49,900/- have been received as subscription to share capital of the appellant from one Smt. Nirmala Barmacha, who is a non-resident Indian, residing in Israel. There is also no doubt that money has been received through proper banking channels, as evidenced by copy of Forward Inward Remittance certificates dated 1.3.2007 and 21.3.2007 issued by Bank of India. Thus Identity of the investor and genuineness of the transaction stand established beyond doubt. The only question is regarding the creditworthiness of the inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same, stating that it is in Israeli language. .But, as stated by me in earlier paragraph, scrutiny of the certificate reveals that certain details are partly written in English. 7. During the course of hearing of the appeal, the appellant was directed to furnish English translation of the Israeli Statement of Account. The appellant produced the same, as directed, during the course of hearing of the appeal. From the said Statement of Account of bank account bearing No. 001/109396/201 it is seen that the following details emerge. Type of Alc. : Current Foreign Resident Deposit Currency : Dollar Period : February 6,2007 to February 26, 2007 As per details of transaction, on 15.2.2006, USD 2,50,000/-was transferred and further, on 26.02.2007, USD 2,00,000 stood transferred. It must be stated here that even in the statement produced before the A.O., written in Israeli tongue, dates and amounts transacted in are written in English. These entries in fact, match and corroborate with the entries as found in the Foreing Inward Remittance Certificates filed. Thus the appellant has been able to explain the source of investment in the Indian company as having been made out of her bank acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Indian Income Tax Return. Therefore, it is held that in the case of money brought in by Shri Nirmal Barmecha, all the three ingredients of the explanation within the meaning of s. 68 been satisfactory proved i.e. identity of creditor, financial capacity of the creditor and geniuses of the transaction. The addition made under s.68 in sum of Rs. 1,98,49,900/- stands deleted. 5. However, the Ld. CIT(A) has confirmed the addition of Rs. 38,75,000/-, after having following observations: "I have considered the submission as made by the appellant. It is acknowledged by the A.O. that indeed appellant had filed confirmation letter, Bank Statement, ITR etc. to evidence the transaction. However, the AO has gone one step further and scrutinized the details as filed. A close scrutiny revealed that all the five companies but one functioned from common premises; all had opened accounts in the same bank, all had received share application money and either on the same day or the next paid sums to the appellant, and all had filed income tax return disclosing meager sums as income, all below Rs. 5000/-. Thus a number of peculiar features have been brought on record which does not accord with no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the entire investment might be in the form of investments made in the assessee company i.e providing accommodation entry of investment in shares at premium. 7. The dividend of meager Rs. 315 has been received by Smt Nirmala Barmecha. 7. On the other hand Ld. AR reiterated the contentions made before CIT(A). He supported the order of CIT(A) with respect to additions deleted by CIT(A). In respect of additions sustained, the Ld. AR contended that share application money was received through banking channel and all particulars required by AO were furnished before him. Accordingly the CIT(A) was not justified in confirming the addition. 8. Against the above order of Ld. CIT(A) both revenue and assessee are in appeal before us, wherein following grounds have been taken. Assessee's ground; 1. "The orders passed by learned Assessing Officer & Commissioner of Income-tax (Appeals) is against equity and justice. 2. The learned Assessing Officer erred in making addition of Rs. 38,75,000/- u/s.68, being 10% of total money receive by appellant towards share capital." Revenue's ground; 1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation money received from Smt. Nirmala Barmecha, we found that Smt. Nirmala Barmecha is a none resident Indian, residing in Israel. The assessee has filed a bank statement to substantiate remittance of money to assessee company. Sources of money was also substantiated by filing the Joint Bank Account of Smt. Nirmala Barmecha with her husband. The Bank statement which is a copy of 'foreign Currency Account Statement', reveals withdrawal of US Dollar 2,50,000/- on 15/2/2007 and a further withdrawal of US Dollar 2,00,000/- on 26.2.2007. The certificate of bank for remittance from the Israeli Accountant dated November 25, 2001 was also filed certifying that source of money was deposits/ savings in her joint account with her husband. We also find that as per the income tax return filed by the Smt. Nirmala Barmecha at India, she was having capital exceeding Rs. 3.4 crores, with investments mainly, in shares and debentures and income arising therefrom amount to Rs. 4.04 lacs which has been also offered for tax. After appreciation of the entire material placed on record, the Ld. CIT(A) concluded that not only identity of share applicant (Smt. Nirmala Barmecha) was established but also genu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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