TMI Blog2018 (10) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... y by these two concerns namely Buniyad Chemicals Ltd. & Talent Infoway Ltd. in assessee as share application and premium amounting to ₹ 35 lacs. During cross examination the AO could not further examine Shri Mukesh Choksi that why he is now admitting that why these two concerns admitted in the assessee company as share application money and share premium. The AO could not controvert the same. CIT(A) also could not give any finding on this aspect. We have gone through the statement of Shri Mukesh Choksi i.e. cross examination by the assessee on 30.10.2013, wherein, he vide question admitted investing by Buniyad Chemicals Ltd. & Talent Infoway Ltd. in assessee as share application and premium. As relying on THE COMMISSIONER OF INCOME TAX VERSUS M/S. ORCHID INDUSTRIES PVT. LTD. [2017 (7) TMI 613 - BOMBAY HIGH COURT] we delete the addition made by AO and confirmed by CIT(A) on account of share application money and share premium and allow the appeal of the assessee on this issue. - Decided in favour of assessee. - ITA No. 3212/Mum/2014 - - - Dated:- 12-10-2018 - SRI MAHAVIR SINGH, JM AND SRI NK PRADHAN, AM For The Appellant : Shri Dharan Gandhi, AR For The Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are application money received amounting to ₹ 35,00,000/- as unexplained cash credit under section 68 of the Act without appreciating the facts and circumstances of the case. The Appellant, therefore, prays that the addition of ₹ 35,00,000/- under section 68 of the Act is not at all justified and the same may be deleted. b. The Ld. CIT(A) failed to appreciate that the Appellant has discharged the primary onus cast upon it to prove the identity, capacity and creditworthiness of the share applicant by furnishing the P.A. Nos. and share application forms. The Appellant, therefore, prays that treating the share application money amounting to ₹ 35,00,000/- as undisclosed income of the Appellant under section 68 of the Act is not at all justified and the same may be deleted. c. The Ld. CIT(A) further failed to appreciate that the share applicant has appeared before the 14. AO during the course of remand proceedings confirming the transaction. Hence, treating the amount of ₹ 35,00,000/- as unexplained cash credit under section 68 of the Act is not at all justified and the me may be deleted. 5. Briefly stated facts are that the assessee has receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or in MIs. Buniyad Chemicals Ltd.. and MIs. Talent lnfoway Ltd.. attended the proceedings before the Assessing Officer. In remand report, it was admitted by him before the Assessing Officer that all the bills/share application money issued/given to different entities were accommodation entries without having any proper transaction The statement was nothing but reiteration of the fact which Shri Mukesh Choksi and their group companies have made before the Investigation Wing In their detailed submission, they have also explained the modus operandi of the group wherein they have given share application money to various persons. It is quite strange that the authorised representative of the appellant white quoting the facts of several cases is trying to infer that the facts of these cases are applicable to the facts of appellant's case. However, I find that the said statement is totally devoid of any merit and is misleading the fact that there are two parties who has done transaction and the other party who categorically denying of having given any share application money to the appellant. Even the entire transactions these two parties have entered with several clients and the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Infoway Ltd. 2500 shares ₹ 17,50,000/- Please explain. Ans. Yes, I confirm the same AO to Deponent No.1 Ans. Yes, I confirm the same. Q.4 Deponent No.2 As you are aware, you are asking for an opportunity to cross examine before the CIT(A) and accordingly, the case has been remanded back to the undersigned. Now, Mr. Mukesh Maneklal Choksi is present before you. Therefore, I request you to take this opportunity and cross examine Mr. Mukesh Chokshi. Ans. Yes I do. Deponent No.2 to Deponent No. 1 a. have you applied for shares of Sunshine Metals Alloys Ind. P. Ltd.? If yes, explain the mode of payment? Ans. Yes, we have applied for shares of the aforesaid company. The mode of payment of share application money are as follows. Sr. No. Company No. of shares Amount Cheque No. date Bank 1. Buniyad Chemicals Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: 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 09/10/2012 was issued calling for various details. Following the rejections of objections raised, vide letter dated 16/10/2012 the assessee submitted that the Department was free to proceed against the share applicant as the assessee had established that the monies were received from proper banking channels from identifiable sources and further stated in the following words in pare 8: 'Your honour have referred that the information from the Additional Director of Income Tax (Investigation, the applicant companies being involved in fraudulent transaction and share application money received by the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 examine Mr. Mukesh Choksi (copy enclosed for ready reference) On perusal of the some it is seen that the assessee has asked following three questions for which Shri Mukesh Choksi replied in affirmative. a) whether you had applied for shares of assessee company and if yes mode of payment? b) Have you received the share certificate of sunshine metals and Alloys lnds. P. Ltd. and c,) Can you submit the relevant details with documents? Since Mr. Mukesh Choksi's answers are in contrary to the statement recorded u/s 131 by the DDIT(lnv.) Mumbai dated 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 show that the money was received through banking channels and there were no immediate withdrawals from the banks which shows that the share application amounts have not been returned back to these parties in cash. Thus, the assessee has discharged the primary onus cast upon it to prove the identity, capacity and genuineness of transactions. We also find that the CIT(A) provided opportunity to assessee to cross examine Shri Mukesh Choksi by sending the matter to AO for remand report. During remand proceeding, the AO provided opportunity to asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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