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Aagam Shares and Commodities P Ltd. Versus The DCIT, Circle-1, Ahmedabad

2016 (7) TMI 605 - ITAT AHMEDABAD

Addition u/s.68 - non genuine share application by director - Held that:- It is not the case that the concession was about true legal position of law and not of facts. We further find that CIT(A) while upholding the addition has noted that the director of the applicant shareholder had admitted the share application made by them to be non genuine and it is not the case of the assessee that the statement was recorded at the back of the assessee and was not made available to the assessee. On the co .....

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MEMBER For The Appellant : Shri S.N. Divatia and Shri P.D. Shah, A.Rs For The Respondent : Shri Sanjay Kumar, Sr.DR ORDER PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : This appeal by the Assessee is directed against the order of the Commissioner of Income Tax(Appeals)-VI, Ahmedabad dated 30/12/2010 for the Assessment Year 2007-08. 2. The relevant facts as culled out from the materials on record are as under:- 2.1. Assessee is a company whose name was changed from KGMS Financial services P Ltd. t .....

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t;) vide order dated 29.10.2009 and the total income was determined at ₹ 69,69,045/-. Aggrieved by the order of AO, Assessee carried the matter before CIT(A) who vide order dated 30.12.2010 (in Appeal No.CIT(A)-VI/DCIT.Cir-1/271/09-10) dismissed the appeal of the Assessee. Aggrieved by the order of CIT(A), Assessee is now in appeal before us and has raised the following grounds. 1. That the learned CIT(A) has erred in law and facts by confirming the addition of ₹ 45,00,000/- of Share .....

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nt. In view of the aforesaid submission, Ground No. 2 is dismissed as not pressed. 2.3. Ground No.1 is with respect to addition u/s.68 of the Act. 3. During the course of assessment proceedings and on perusing the Balance Sheet, Assessing Officer (AO) noticed that Assessee had received fresh capital of ₹ 45 lacs against the allotment of 45000 equity shares having face value of ₹ 10 each at a premium of ₹ 90 per share, the details of which are tabulated at Page 2 of the assessme .....

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r got held inquiries conducted u/s.131 of the Act at the premises of Dhanvidya Impex P Ltd., Dhanvidhya Multisales P Ltd. and Prabhavi Investments P Ltd. and during the course of inquiry statement of Shri Rupang Shah, the Director of the aforesaid three companies were recorded u/s 131 of the Act. In the statement, Shri Rupang Shah inter alia submitted that he had entered into a arrangement for purchase and sale of shares with the directors of the assessee and as per the arrangement, the aforesai .....

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of the Assessee. AO conducted simultaneous inquiry at the premises of Prabhavi Investment P Ltd. wherein the statement of Pankaj Shah, its director was recorded u/s 131 of the Act, wherein he denied having any knowledge of the affairs of the company. AO noted that the statement of Shri Rupang Shah was brought to the notice of Chetan Shah, the director of the Assessee. AO noted that Chetan Shah submitted that the share capital introduced was genuine but according to AO, no supporting evidence to .....

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ee by holding as under: 2.3. I have considered the facts of the case, assessment order and appellant s submission. Appellant took bogus share capital to the extent of ₹ 45 lakhs during the year from various companies as mentioned in assessment order. All these companies who were made shareholders are managed by two persons. Statements of these persons were recorded by the assessing officer who categorically stated that the said capital provided by them was not genuine. It was against cash .....

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essee is now in appeal before us. 4. Before us, Ld AR reiterated the submissions made before AO and CIT(A) and further submitted that the Director, Shri Chetan Shah had not accepted the bogus share application money and that any admission against the law by the assessee is not binding and cannot be enforced under law. He further submitted that the offer made was subject to condition that no penalty u/s 271(1)(c) of the Act shall be levied but since AO has levied the penalty, no addition could ha .....

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06 (Gau). As an alternate submission, he submitted that the matter be remitted back to CIT(A) to decide the issue on merits. Ld DR on the other hand pointed to the various findings and observations of AO and supported the order of lower authorities. He also placed reliance on the decision of Delhi High Court in the case of CIT vs Nipun Builders & Developers P Ltd. reported in (2013) 30 taxmann.com 292 (Del). He further submitted that the Assessee has neither taken a ground before CIT(A) nor .....

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res of the assessee-company at ₹ 7/- per share meaning that the shares were purchased at a discount of ₹ 3/- per share and that in the month of March 2007 the assessee had issued the shares at a premium of ₹ 90/- per share and that no valuation exercise was undertaken by the assessee to determine the book value or net worth of the shares. These facts have not been controverted by the Assessee. Before us, it is Assessee s contention that the amount of receipt of share capital wa .....

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