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TMI Blog2018 (10) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment under section 147 of the Act without having any new tangible material in his possession to show that any income has escaped assessment. The Appellant, therefore, prays that reopening of assessment on the same set of facts during the original assessment amounts to change of opinion. The Appellant, therefore, prays that the notice issued under section 148 of the Act as well as subsequent proceedings are void-ab-initio and the same may be quashed. b. The ld. CIT(A) further erred in confirming the action of the Ld. AO. in issuing notice under section 148 of the Act without recording proper and valid reasons to show that any income has escaped assessment. The Appellant, therefore, prays that reopening of its assessment is bad-in-law and the same may be quashed." 3. As the learned Counsel for the assessee has not pressed this issue and want to withdraw under instructions of the assessee, the learned Departmental Representative was asked and he has not objected. Hence, we dismiss this issue of re-opening as withdrawn. 4. The next issue on merits is as regards to the order of CIT(A) confirming the action of the AO in treating the share application money as unexplained cash c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of share application money and share premium. Accordingly, the AO added these receipts of share application money and share premium as cash credit under section 68 of the Act. Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) confirmed the action of the AO by observing in para 3.3 as under: - "3.3 I have carefully considered the facts of the case, observation of the Assessing Officer and also gone through the appellant's contention. I find that the authorised representative of the appellant relied on various judgements mainly dealing with two issues i.e. the identification of persons who had advanced share application money and secondly the onus to prove. In majority of the decisions cited by the appellant, the clinching point for consideration by the Hon'ble Courts are that where the identity of persons who had provided the share application money is proved then the onus is on the Department to prove whether there exists creditworthiness or not. In the instant case, I find that Shri Mukesh Choksi who was the director in MIs. Buniyad Chemicals Ltd.. and MIs. Talent lnfoway Ltd.. attended the proceedings before the Assessing Officer. In remand report, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on amounts have not been returned in cash. Thus, the assessee has discharged the primary onus cast upon it to prove the identity, capacity and genuineness of transactions. The assessee, therefore, submits that the AO is not at all justified in treating the share application money amounting to Rs. 35,00,000/- received during the impugned assessment year as undisclosed cash credit under section 68 of the Act. The CIT(A) according to the learned Counsel when it was contended that they were not given proper opportunity to cross examine the departmental witness i.e. Shri Mukesh Choksi, he was allowed opportunity and he drew our attention to the statement of Shri Mukesh Choksi i.e. cross examination by the assessee on 30.10.2013. Wherein, he vide question No. 3 to 7 admitted investing by Buniyad Chemicals Ltd. & Talent Infoway Ltd. in assessee as share application and premium thereon as under: - "Q.3 AO to Deponent No.2 During the course of assessment proceedings in the case of Sunshine Metals & Alloys Ind. P. Ltd, it has come to light that the company had allotted 5000 shares, details of which are as under: 1) Buniyad Chemicals Ltd. -2500 shares$. 17,50,000/- 2) talent Infowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the remand report vide CIT(A)'s letter No. CIT(A)-8/255/12.-13/2013-14/53 dated 21st August 2013 was called for from the Assessing Officer. The AO vide letter No. ITO-4(3)(4)/Remand Report /2013-14, dated 14.11.2013 has submitted as under: - "'As per your direction, the undersigned have verified the submission filed by the assessee before your honour in which it is stated that the assessee was not given proper opportunity to cross examination of the department's witness though specifically requested during the course of reassessment proceedings In this connection the undersigned submit the comments as tinder: The case was reopened as per provisions of section 147 and a notice u/s 148 dated 09/03/2012 was issued, in response to the same, the assessee filed an e-return on 28/03/2012. A notice u/s 143(2) dated 25/04/2012 was served on the assessee Vide letter dated 26/04/2012 the assessee was also furnished a copy of the reasons for issuing the notice u/s 148. In response to the same. assessee Authorised Representative vide letter dated 20/09/2012 filed objections on record on 05/10/2012 against the action initiated u/s 147. Simultaneously a notice u/s 142(1) dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed at the earliest. From the above it is clear that the assessee had requested for documents or any evidence available with the A.O. or department for cross examination, which had been provided to the assessee. However, the assessee had not asked for any cross examination thereafter. Therefore, the contention of the assessee that assessee was not given opportunity to cross examination of the department's witness is baseless. Now, your honour has directed the undersigned to give an opportunity to the assessee to cross examine the department's witness. In this connection a summons u/s 131 of the IT Act is issued and served on the witness, Shri Mukesh M. Choksi, to attend the office of the undersigned on 8/10/2013. However, on 8/10/2013, Shri Choksi requested for few days time due to his ill-health. Further vide letter dated 11/10/2013 he has requested for adjournment after 19"' 2013. Hence date of cross examination is adjourned to 22/10/2013. On 22/10/2013, since the assessee was unable to attend the same was adjourned and on 3011012013 both the parties attended and statement has been taken on oath of both the parties and assessee has been allowed to cross ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uniyad Chemicals Ltd. and M/s Talent lnfoway Ltd. totalling to Rs. 35,00,000/-." 8. The learned Counsel for the assessee stated that while cross examining Shri Mukesh Choksi, he admitted that Buniyad Chemicals Ltd. & Talent Infoway Ltd have invested in term of share application money and share premium in assessee company. The assessee furnished the name, address, PAN no and Bank details to the AO and it is the duty of the AO to make further investigation and also to provide cross examination of the parties on whose statement he is relying upon. The learned Counsel for the assessee pointed out that the statement given by Shri Mukesh Choksi, where assessee's name is not at all mentioned as one of the beneficiaries of the share application money. On the other hand, the learned Departmental Representative, relied on the assessment order and the findings of CIT(A). 9. We have heard rival contentions and gone through the facts and circumstances of the case. We find from the facts of the case that the assessee has furnished the Name, Address, PAN no and Share Application Form to prove that the shares were allotted to the applicants. The assessee has also furnished its bank statement to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir account. 6. The Tribunal has considered that the Assessee has produced on record the documents to establish the genuineness of the party such as PAN of all the creditors along with the confirmation, their bank statements showing payment of share application money. It was also observed by the Tribunal that the Assessee has also produced the entire record regarding issuance of shares i.e. allotment of shares to these parties, their share application forms, allotment letters and share certificates, so also the books of account. The balance sheet and profit and loss account of these persons discloses that these persons had sufficient funds in their accounts for investing in the shares of the Assessee. In view of these voluminous documentary evidence, only because those persons had not appeared before the Assessing Officer would not negate the case of the Assessee. The judgment in case of Gagandeep Infrastructure (P.) Ltd. (supra) would be applicable in the facts and circumstances of the present case." 11. Respectfully following the ratio of Hon'ble Bombay High court in the case of Orchid Industries Pvt. Ltd. (supra) and the facts of the present case, we delete the addition ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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