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TMI Blog2016 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground of appeal is about deleting the addition of Rs. 55 lakhs made by the AO, u/s. 68 of the Act. During the course of assessment proceedings, the AO directed the assessee to file the details of subscription of share capital received during the year from Real Gold Trading Private Limited(RGTPL), Hema Trading Company Private Limited(HTCPL)and Yash V Jewels Ltd. (YVJL). The assessee filed the details along with the confirmations of the shareholders. While surfing the Internet database, the Google search on one of the shareholders namely M/s. Kush Hindustani led the AO to a link of SEBI site. The site had listed an order of SEBI passed in the case of Pyramid Samarai Ltd. He found that one Nirmal Kotecha(NK) was using large number of front ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directors of the share-subscriber companies. After considering the submission of the assessee, the AO stated that search and seizure action in the cases of Rajat Pharmachem group and Spanco were carried out by the Department, hat during the search proceedings it was found that the subscriber group was indulged in paper transaction of trading in goods where there was no physical movement of goods. The AO further observed that money had been received from specimen bank account through proper banking channels, that the identity of the subscriber was not in dispute, that the view of the adverse finding by SEBI regarding the capacity of the subscriber-companies were was available on net, that it was the duty of the assessee to prove that money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the remand report and the submission of the assessee, the FAA held that the AO had given a categorical finding that no details were available in the assessment record that connected the receipt of contribution of share application money by the assessee to certain search and seizure actions carried out by the investigation wing. As the AO had not conducted enquiries as directed by the FAA, he asked the AO to go through the submission of the assessee, dated 9/3/2010, along with the paper book and to give finding on the various objections raised by the assessee. He also gave certain per the directions to the AO and file a fresh remand report. After considering the second remand report, the FAA mentioned that the assessment order was silent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had filed the complete addresses along with PAN filed for assessment year 2007-08 along with the balance sheet and profit & loss account and the bank statement of all the subscribers, that a sworn in affidavit of the directors of the subscriber companies were also filed in response to the show cause notice issued by the AO, that the reply further revealed that the net worth of all the three subscribing companies was more than Rs. 2 crores, that no cash had been deposited in the bank accounts prior to the issue of check to the assessee company, that they had obtained secured loan from the banks, that by filing all such details the assessee had proved the identity of the subscribers as well as the creditworthiness and genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the assessment proceeding including the affidavits of the directors and the confirmations, that AO himself had admitted that there was no material related with any search and seizure action that could prove that subscriber companies were engaged in bogus billing, that AO had not doubted the entity of subscribers. 5. We have heard the rival submissions and perused the material before us. We find that the AO had made an addition of Rs. 55. 00 lakhs invoking the provisions of section 68 of the Act, that RGTPL, HTCPL and YVJL had subscribed Rs. 20. 000 lakhs, Rs. 20. 00 lakhs and Rs. 15. 00 lakhs respectively as share subscription money, that the AO had not doubted the identity of the subscribers, that he was of the opinion that genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s found that the AO did not make any enquiries with the subscribers about the investments made by them. The FAA has mentioned that the incidence of price rigging took place in the month of December of the succeeding year whereas the subscription was made in earlier year. Thus, it could not be said that assessee had routed its unaccounted money through the subscribers. In our opinion, assessee had discharged its onus in proving the identity of the creditor as well as creditworthiness of the subscribers and genuineness of the transactions. In these circumstances, we are of the opinion that the order of the FAA does not suffer from any legal or factual infirmity. The AO had not made any enquiries to substantiate his stand. Considering the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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