TMI Blog2016 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... f the FAA, he chose not to examine the evidences produced by the assessee. The FAA had given a clear finding of fact that there was no evidence of deposit of cash in the bank accounts of the subscriber at the time of issuing cheques to the assessee for allotting shares. The AO has ignored the fact that the net worth of all the three subscribers was approximately ₹ 2. 00 crores, that the transactions were carried out through banking channels. It is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 companies to manipulate the security market and to prove the funds to several layers in order to hide the source, that SEBI had identified a list of 230 entities also having similar operation, that the subcribers were in the list of 230 entities. The AO was of the opinion that financial credentials of the three share subscribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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 received by it was coming out of the disclosed and accounted source of income, that the nature and source of credit entries appearing in the books of accounts in the laser of share subscribers had not been satisfactorily explained by the assessee. Finally, he held that money received and accounted as share application money am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 about the confirmation letters filed by the subscribing companies and the notarised sworn in affidavit filed by the directors, that there was no whisper in the order about the existence of such evidence filed during the course of assessment proceedings, that the AO had miserably failed to carry out specific directions iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by the AO, that the reply further revealed that the net worth of all the three subscribing companies was more than ₹ 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 of the transaction, that the AO himself had mentioned, in the assessment order, that there was no dispute with the identity of the shareholders, that the AO did not controvert the evidences filed before him, that he had never made an attempt to conduct enquiries with subscriber of share application money by issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5. We have heard the rival submissions and perused the material before us. We find that the AO had made an addition of ₹ 55. 00 lakhs invoking the provisions of section 68 of the Act, that RGTPL, HTCPL and YVJL had subscribed ₹ 20. 000 lakhs, ₹ 20. 00 lakhs and ₹ 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 of the transaction and creditworthiness of the subscribers was not proved by the assessee, that he referred to order of SEBI and search and seizure actions carried out by the Investigation Wing of the department for making the addition, that the SEBI had found that all the three subscribers were ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
