TMI Blog2018 (4) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... e irrelevant. A perusal of the bank statements of the share applicant companies clearly shows that no cash was found to be deposited prior to the issue of cheque - It was brought to the notice of the A.O. and the First Appellate Authority that Samrat Dealcom Pvt. Ltd. was converted into LLP on 25.07.2014, Breeze Mercantile Pvt. Ltd. was converted into LLP on 24.03.2015 and Shristi Barter Pvt. Ltd. was converted into LLP on 01.01.2015. Moreover, the attendance of one of the directors Shri Rajesh Agarwal has been recognized by the A.O., therefore the allegation that the share applicant companies do not exist holds no water. No merit in the additions made by the A.O. and confirmed by the First Appellate Authority - Decided in favour of assessee. - ITA. Nos: 51, 52 & 56/Raipur/2017 - - - Dated:- 16-4-2018 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER For The Appellant : Shri R. B. Doshi, C. A. For The Respondent : Shri R. K. Singh, D.R. ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. The captioned three appeals are by three different appellants preferred against three separate orders of the ld. CIT(A), Raipur perta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awal (page no. 25 of PB Vol. Ill) Name of investor Directors Breeze Mercantile Pvt. Ltd. Raju Shukla, Rajendra Kumar Vaishnav (Page no. 56 of PB Vol.1) Shristi Barter Pvt. Ltd. Raju Shukla, Rajendra Kamar Vaishnav (Page no. l00 of PB Vol.1) 5. From the above, it can be seen that not only the directors are common but also the director of the appellant company is also a director of the share applicant companies. Therefore, it can be safely concluded that the impugned transaction is not between strangers. 6. During the course of the scrutiny assessment proceedings and in order to verify the identity, genuineness of transaction and the capacity of the subscribers, the A.O. issued notices u/s. 133(6) of the Act to the share applicant companies which were returned unserved. The A.O. formed a belief that the share applicant companies are non-est. 7. We find that the Assessing Officer and the First Appellate Authority has completely ignored the direct evidences which justify the share application money and the share premium. The direct evidence are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the new address given during the statement. The conclusions drawn by the A.O. are totally based on extraneous consideration as mentioned elsewhere. It was brought to the notice of the A.O. and the First Appellate Authority that Samrat Dealcom Pvt. Ltd. was converted into LLP on 25.07.2014, Breeze Mercantile Pvt. Ltd. was converted into LLP on 24.03.2015 and Shristi Barter Pvt. Ltd. was converted into LLP on 01.01.2015. Moreover, the attendance of one of the directors Shri Rajesh Agarwal has been recognized by the A.O., therefore the allegation that the share applicant companies do not exist holds no water. 12. The charging of the share premium is justified by the fact that the appellant company launched housing project at Vidhansabha Road, Raipur, a prime location between old Raipur and new Raipur and looking towards the growth in the State of Chhattisgarh in the real estate market. The charging of the share premium is justified. 13. The Hon ble High Court of Bombay in the case of Gagandeep Infrastructure Pvt. Ltd. 394 ITR 680 has considered and observed as under:- ( e) We find that the proviso to Section 68 of the Act has been introduced by the Finance Act 2012 with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This dispute was more, so because of the fact that the assessee company was incorporated during the AY. Therefore, according to the revenue authorities, it was beyond any logical reasoning that a company with zero balance sheet could garner ₹ 490 per share premium its subscribers. Such transaction may raise eyebrows but considering the subscribers to the assessee company, the test for the genuineness of the transaction goes into oblivion. It was an undisputed fact admitted by the Revenue authorities that 10,19,000 equity shares has been subscribed and allotted to IDFC PE Fund-11 which company was a Front Manager of IDFC Ltd., in which company Government of India was holding 18 percent of shares. The contributors to the IDFC PE Fund-II were all public sector undertakings. Therefore, to raise eyebrows to a transaction where there was so much of involvement of the Government directly or indirectly did not make any sense. No doubt a non-est company or a zero balance company asking for a share premium of ₹ 490/- per share defies all commercial prudence but at the same time we could not ignore the fact that it was a prerogative of the Board of Directors of a company to decid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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