TMI Blog2018 (9) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER This appeal by assessee has been directed against the Order of the Ld. CIT(A)-35, New Delhi, Dated 15.02.2018, for the A.Y. 2008-2009, challenging the reopening of the assessment under section 147/148 of the I.T. Act, 1961 and addition of ₹ 40 lakhs under section 68 of the I.T. Act, 1961. 2. Briefly the facts of the case are that original return declaring income of ₹ 9,74,054/- for the assessment year under appeal was filed by the assessee-company on 29.09.2008 and the same was processed under section 143(1) of the I.T. Act. Thereafter, the DCIT, Investigation Wing vide their letter dated 12.03.2013 has informed that during the course of search/ survey action under section 132/133A of the I.T. Act conducted at the residential and business premises of Shri Surender Kumar Jain and his brother Shri Virender Jain, certain incriminating documents were found and seized. These documents include date-wise hand-written cheque books and cash hooks maintained by Shri S.K. Jain and his brother over a long period of time. In these cheque books and cash books details of cheque provided to the beneficiaries companies/ entities/persons and receipt of cash by them an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the re-assessment proceedings and that investigation conducted by the Investigation wing is part of the department who have produced sufficient evidence on record against the assessee for reopening of the assessment. Therefore, he did not interfere with the reopening of the assessment and rejected this ground of appeal of assessee. 3. The assessee-company as regards the addition on merit, submitted that assessee-company filed complete documentary evidence before the authorities below which prove the identity of the investors, their creditworthiness and genuineness of the transaction. One of the investor M/s. Singhal Securities Pvt. Ltd., has assessed to tax even for block assessment order under section 153C/153A and both the investors have confirmed the genuineness of the transaction directly to the A.O. in their reply to the notice under section 133(6) of the I.T. Act. One of the Director of the Investor company M/s. Finage Leasing Finance (India) Ltd., was produced before A.O. who have confirmed the transaction with the assessee-company and investment made by them. The A.O. did not make any further enquiry on the same, therefore, no addition should be made against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed cannot be treated and regarded as perverse. The appeal is dismissed as no substantial question of law arises. 5.1. He has also relied upon the order of ITAT, Delhi, SMC-Bench in the case of Moti Adhesives P. Ltd., Delhi vs. ITO, Ward-17(2), New Delhi in ITA.No.3133/Del./2018 dated 25.06.2018 in which in paras 6 and 7 it was held as under : 6. Keeping in view of the facts and circumstances of the case and respectfully following the aforesaid decisions, I hold that mere non-production of Director of said shareholder company cannot justify adverse inference u/s 68 of the Act. Even if there was any doubt if any regarding the creditworthiness of the share applicants was still subsisting, then AO should have made enquiries from the AO of the share subscribers as held by Hon'ble High Court in CIT vs DATAWARE (supra) which has not been done, so no adverse view could have been drawn, In this case on hand, the assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants, thereafter the onus shifted to AO to disprove the documents furnished by assessee and in my view it cannot be brushed aside by the AO to draw the advers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to tax and transactions are made through banking channel. The documentary evidences filed by assessee- company on record have not been rebutted by the A.O. in any manner. I rely upon the following decisions. 7.1. CIT vs. Fair Investment Ltd., 357 ITR 146 in which it was held that A.O. did not summon investors and did not make efforts. There is no finding that material disclosed was untrustworthy. The Appellate Authorities rightly deleted the addition. 7.2. Decision of Supreme Court in the case of CIT vs. Lovely Exports Pvt. Ltd., (2008) 216 CTR 195 in which it was held as under: If the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of assessee company. 7.3. Decision of Hon ble jurisdictional High Court in the case of CIT vs. Kamdhenu Steel and Alloys Ltd., Ors. 361 ITR 220 (Del.) in which it was held as under : Once adequate evidence/material is given, which would prima facie discharge the burden of the assessee in proving the ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholders are genuine parties. They are not bogus and fictitious therefore, the impugned order is set aside. 7.7. Decision of Hon ble jurisdictional High Court in the case of Divine Leasing Finance Ltd., 299 ITR 268, in which it was held as under : No adverse inference should be drawn if shareholders failed to respond to the notice by A.O. 7.8. Decision of Hon ble M.P. High Court in the case of CIT vs. Peoples General Hospital Ltd., (2013) 356 ITR 65, in which it was held as under : Dismissing the appeals, that if the assessee had received subscriptions to the public or rights issue through banking channels and furnished complete details of the shareholders, no addition could be made under section 68 of the Income-tax Act, 1961, in the absence of any positive material or evidence to indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represented the company's own income from undisclosed sources. It was nobody's case that the nonresident Indian company was a bogus or non-existent company or that the amount subscribed by the company by way of share subscription was in fact the money of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xistence of the shareholders and the genuineness of the transaction. The Income-tax Appellate Tribunal confirmed the order of the Commissioner of Income-tax (Appeals) as it was also of the opinion that the assessee had been able to prove the identity of the share applicants and the share application money had been received by way of account payee cheques. On appeal to the High Court: Held, dismissing the appeals, that the deletion of addition was justified. 7.10. Decision of Hon ble jurisdictional High Court in the case of CIT vs. Winstral Petrochemicals P. Ltd., 330 ITR 603, in which it was held as under : Dismissing the appeal, that it had not been disputed that the share application money was received by the assessee company by way of account payee cheques, through normal banking channels. Admittedly, copies of application for allotment of shares were also provided to the Assessing Officer. Since the applicant companies were duly incorporated, were issued PAN cards and had bank accounts from which money was transferred to the assessee by way of account payee cheques, they could not be said to be non-existent, even if they, after submitting the share applications h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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