9911796707
TMI Blog2013 (12) TMI 1529X X X X Extracts X X X X X X X X Extracts X X X X ..... is engaged in manufacturing of the segments used in the marble sawing. The Company came into existence on 16.06.2003. Thus, the previous year related with the Assessment Year 2004-05 had been the first year of the business of the assessee company. In the original return filed on 01.11.2004 under Section 139 of the Act, the assessee Company declared a loss of Rs. 3,88,740/- . It appears that search and seizure operation under Section 132 of the Act were carried out on 23.01.2006 at the business premises of the assessee along with the residential as well as other business premises of Choudhary Group of Cases; and pursuant thereto, notices under Section 153A were issued. In the return filed on 06.12.2006 in response to the notice under Section 153A, the assessee company declared a loss of Rs. 3,38,740/- 3. On the return so filed, the assessment was completed on 28.12.2007 at the total income of Rs. 76,61,210/- wherein, the Assessing Officer proceeded to make an addition of Rs. 79,80,000/- on account of share capital and share premium alleged to have been received from five Delhi based companies. Another amount of Rs. 19,950/- was also added as being the commission paid for arranging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jecting the confirmations and affidavits filed by aforesaid directors of the purchaser companies was that the directors did not retracted their statement in such confirmations or affidavits. The ld. A/R's contention is that the directors of the purchaser companies have fully replied against the ld. A.O's letter u/s 133(6). There is no question to retract against anything which is not mentioned in the letter u/s 133(6). Therefore, the rejection of confirmations and affidavits filed by the directors of the purchasing companies was not justified and the various case laws relied by him is still applicable in this case and binding on the department. Moreover the ld. A/R also submits that the statement made by third party on the back of the assessee cannot be utilized against him without giving him opportunity of confrontation or cross-examination of such persons making such statement. This opportunity was not provided by the ld. A.O. Under such circumstances the addition on account of receipt of money for regular and premium sales of shares cannot be sustained. Considering the facts and circumstances of the case, particularly that the ld. A.O could not bring any material to disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company had received share application money or not. It is seen that share capital was received through account payee cheques along with premium amount totalling to Rs. 79,80,000/- from five private limited companies i.e. M/s. Sanraj Associates Pvt Ltd., M/s. Fortress Impex Pvt. Ltd., M/s. Sumit Overseas Pvt. Ltd., M/s. Pushpanjali Caps Pvt. Ltd. and M/s. B.P. Builtech Pvt. Ltd. all these companies are situated at Delhi. All these companies are assessed to tax and they are registered under the Companies Act. Return of allotment of shares in prescribed form No.2 to the Registrar of Companies was also filed before Assessing Officer as well as before ld. CIT (A). It is further seen that the addition is based on alleged statement of Shri Pradeep Jindal recorded under section 131 behind the back of the assessee on 15.4.2004. The assessee was not even afforded any opportunity of cross examination nor Shri Pradeep Jindal was examined in the course of assessment proceedings in case of assessee nor he was examined in presence of assessee company nor he was confronted with the documents of contemporary period showing investment in shares made by those five companies through regular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cash creditor and shareholder. In case of cash creditor, the cash creditor has right to demand the money back from the assessee. However, in case of shareholder, there is no liability of the company to refund the amount as the shares can be sold in the market. Therefore, in case of cash creditor, heavy onus lies on the assessee to prove whether cash creditor was genuine or not. However, in case of shareholder, it is held by various High Courts and Hon'ble Supreme Court that if shareholders are not genuine, then in that case no addition can be made in the hands of the company but the case can be reopened of the shareholders for enquiring about their source of buying the shares in the company. 10.1 The contention of ld. CIT D/R that cash was deposited in the account of the respective five companies before issuing cheque to the assessee company for allotting the shares. Therefore, there is every likelihood that cash deposited in the account of those companies was belonging to assessee company for issuing cheque under the garb of issuing shares. In our view, this contention is without any evidence and if the cash deposited in the account of those companies then onus lies on thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statements of the persons relating with the assessee-company so as to provide a basis for the findings recorded by the AO. 9. In any case, the points as sought to be raised by the appellant in the present case are all the matters relating to appreciation of evidence. The relevant factors have been taken into account and considered by the appellate authorities before returning the findings in favour of the assessee. As regards the referred share capital contributors, it is noticed that they are existing assessees having PA numbers; and are being regularly assessed to tax. The appellate authorities cannot be said to have erred in deleting the additions in their regard at the hands of assessee-company. 10. Ultimately, the question as to whether the source of investment or of credit has been satisfactorily explained or not remains within the realm of appreciation of evidence; and the Courts have consistently held that such a matter does not give rise to any substantial question of law. In the case of CIT v. Orissa Corpn. (P) Ltd. [1986] 159 ITR 78 (SC), the Hon'ble Supreme Court held as under:- "13. In this case, the assessee had given the names and addresses of the alleged c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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