TMI Blog2018 (7) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... - - Dated:- 11-7-2018 - Shri S.S. Godara, JM And Shri M.Balaganesh, AM For The Appellant : Shri S.K. Tulsiyan, Advocate For The Respondent : Shri S. Dasgupta, Addl. CIT (DR) ORDER Per M.Balaganesh, AM 1. This appeal by the Assessee arises out of the order of the Learned Commissioner of Income Tax(Appeals)-13, Kolkata [in short the ld CIT(A)] in Appeal No. 152/CIT(A)- 13/W-4(4)/Kol/2016-17 against the order passed by the ITO, Ward-4(4), Kolkata [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short the Act ) dated 16.03.2015 for the Assessment Year 2012-13. 2. The only issue to be decided in this appeal is as to whether the ld CITA was justified in upholding the addition made towards share capital u/s 68 of the Act in the sum of ₹ 1,25,00,000/- in the facts and circumstances of the case. 3. The brief facts of this issue is that the assessee is a private limited company incorporated on 26.5.2009 with the object of manufacture and sale of all kinds of papers, board, corrugated board, printing, absorbent and writing paper. It is a sister concern of M/s Krishna Tissues P Ltd (in short KTPL) which is engaged in the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of Directors in producing all the details requisitioned u/s 131 of the Act, the identity and creditworthiness of the shareholders and genuineness of the transactions between shareholders and assessee company could not be verified and accordingly added the entire money received towards share capital and share premium in the sum of ₹ 1,25,00,000/- as unexplained cash credit of the assessee u/s 68 of the Act. 3.2. The assessee pleaded before the ld CITA that all the requisite details that were called for were duly furnished before the ld AO and there is no reason for the ld AO to conclude that the three ingredients of section 68 of the Act were not conclusively proved by the assessee warranting making an addition thereon. It was submitted that the ld AO nowhere in her order had specified that what premium, according to her, ought to be reasonable share premium per share in place of ₹ 90 per share considered high by her. The assessee also submitted that the ld AO ignored many vital factors including its book value per share being ₹ 29.35 per share before fresh issue of subject share capital, future prospects of doing business in big way without need to ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on record. 3.3. The ld AO submitted his remand report by stating that summons were issued to the 6 share applicants . Out of that, three could not be delivered and returned with a remark insufficient address . Two entities did not prefer to appear but had send their submission along with copy of ITR for Asst Year 2012-13, profit and loss account, bank statements , share application and allotment letter. One of them neither appeared nor submitted any reply in this regard. Accordingly, the ld AO concluded that verification could not be carried out in respect of share applicants as directed by the ld CITA in the remand order. 3.4. The assessee again submitted before the ld CITA that the ld AO had not carried out the requisite enquiry and examination as directed by the ld CITA and that the directors of the share applicant companies were willing to appear before the ld AO. The remand report of ld AO clearly proves that because of his overburden and being pre-occupied with time barring cases, necessary verifications could not be carried out. Instead the ld AO had mentioned about alleged statements of directors of asssesse, share applicant companies allegedly admitting that those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith AO and copy of deposition given by Mr B M Nangalia on 16.12.2016 before the AO in assessment proceedings of KTPL (post survey) . It was submitted that the depositions made before the DDIT(Inv.) having been retracted later, does not have any evidentiary value. It was submitted that in the assessment proceedings of KTPL for the Asst Year 2013-14 which was completed post survey in their case on 29.7.2015, the ld AO after examining the records and directors had accepted the share capital and premium received by KTPL in the scrutiny assessment framed for the Asst Year 2013-14 in the hands of KTPL. However, the share capital and premium received by KTPL from the very same shareholders during the Asst Year 2014-15 was subject matter of addition in the scrutiny assessment proceedings for the Asst Year 2014-15, which was also confirmed by the ld CITA. Aggrieved, the assessee preferred an appeal before this tribunal which was decided in favour of the assessee in ITA No. 2215/Kol/2017 dated 1.12.2017 in the case of KTPL for Asst Year 2014-15. This tribunal order was also placed before the ld CITA by the assessee before us. The ld CITA however did not heed to the contentions of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.01.2012 Mahamaya Tie-up Pvt. Ltd. 20000 227257 IDBI Bank 2,000,000 AAFCM6647R 01.02.2012 20000 06.03.2012 R.B.M Impex Pvt. Ltd. 25000 584062 Punjab National Bank 2,500,000 AADCR6857Q 13.03.2012 25000 125000 12,500,000 125000 4.1. We have gone through the statements recorded from Shri Brij Mohan Nangalia, Shri Rajesh Kumar Singhania, Shri Sanjay Kumar Bajoria and Shri Jaswant Nangalia wherein initially they had stated that they were involved in providing bogus accommodation entries in the form of share capital / share premium for various companies. We find that these statements were subsequently retracted by them within 2 days from the date of recording the statement and an independent affidavits were filed by the said parties. These documents are enc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held in various companies by the directors of share applicant companies. 4.3. It is not in dispute that after collection of all these documents, the ld AO also sought to cross verify the same from the shareholder companies by issuing notice u/s 133(6) of the Act independently behind the back of the assessee. All these notices u/s 133(6) of the Act were duly responded by the share applicant companies along with their various documents to prove their identity, their creditworthiness and genuineness of transactions, wherein they had duly confirmed that they had indeed invested in the assessee company with premium. All these documents are enclosed in pages 129 to 211 of the Paper Book filed before us. We find that one of the directors of the assessee company had duly responded to the summons issued u/s 131 of the Act before the ld AO. He had given proper explanations before the ld AO regarding the transactions. The statement recorded from him by the ld AO is enclosed in pages 78 to 80 of the Paper Book filed before us. 4.4. It is not in dispute that the ld AO in the remand proceedings having stated that due to paucity of time and due to heavy pressure of time barring assessments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as much as the ld AO had recorded further statement from the very same directors during the course of assessment proceedings. Hence the ld AO ought not to have placed any reliance on the statements recorded by DDIT(Inv.) which is not supported by any other corroborative evidences. 4.5. Hence we find that the main reliance placed by the ld AO on the statements recorded from directors in the case of KTPL had been already addressed by this tribunal in the case of KTPL vide order dated 1.12.2017. Hence the reliance placed on those statements which stood retracted later and properly explained cannot be used as an evidence in the scrutiny proceedings of the assessee company before us and no adverse inference could be drawn on the assessee company. We would like to place reliance on the decision of the Hon ble Apex Court in the case of Vinod Solanki vs Union of India reported in (2009) 233 ELT 157 (SC) wherein in the context of using the retracted statement had held as under:- 22. It is a trite law that evidences brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidences, which would lend adequate as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises. 4.7. We find that all the questions that were relevant for the assessment has already been asked by the ld AO from Shri Jaswant Kumar Nangalia and Shri Brij Mohan Nangalia during the course of assessment proceedings of KTPL, a group company of assessee company. In the said statement, they had categorically replied that their companies had duly invested in the share capital with premium in KTPL group of companies which admittedly includes assessee company also. They had duly explained the purpose of making such investments with proper reasoning thereon in their ..... X X X X Extracts X X X X X X X X Extracts X X X X
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