TMI Blog2018 (10) TMI 1295X X X X Extracts X X X X X X X X Extracts X X X X ..... and pass a speaking order on all the issues raised by the A.O. - Appeal by the Revenue stands allowed for statistical purpose. - I.T.A. No. 4520/Mum/2016 - - - Dated:- 22-10-2018 - Shri Shamim Yahya, AM And Shri Ram Lal Negi, JM For the Appellant : Shri Chaudhary Arunkumar Singh For the Respondent : Shri S. C. Tiwari Rutuja Pawar ORDER PER SHAMIM YAHYA, A. M.: This is an appeal by the Revenue is directed against the order by the learned Commissioner of Income Tax (Appeals)-9, Mumbai ( ld.CIT(A) for short) dated 15.03.2016 and pertains to the assessment year (A.Y.) 2011-12. 2. The issue raised is that the ld. CIT(A) erred in directing the Assessing Officer (A.O. for short) to delete the addition of ₹ 3,07,00,000/- made u/s. 68 of the Income Tax Act, 1961 (the Act hereinafter). 3. Brief facts of the case as emanating from the order of the A.O. are as under: The assessee company was incorporated on 29.06.2010. Both the Directors, i.e., Shri Purushottam Khandelwal Shri Mangelal Joshi are resident of Kolkata. The company's registered address is Moolchand Lalji Building No.2, Thakurdwar, Mumbai. The authorized share capital of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice and furnished the details. From these financial details, the A.O. found that the companies who have given the money in the form of share application money to the assessee company have generated the funds via share application money only. The natures of business of these companies are very general in nature and most of the companies are having the main objects to be pursued by the company on its incorporation to carry on the business of trading in shares and securities. 5. The A.O. further noted that since the matter was referred to the Investigation Wing, Kolkata, the Investigation Wing also carried out investigation and submitted the report. From all the information gathered, the A.O. referred to the profile of the share applicants and found that they were same. After mentioning the details of these companies, the A.O. summarized the silent feature of this company as under: i) Majority of the companies are working from the one or two addresses as stated above ii) Shri Purshottam Khandelwal who is the Director of the assessee company is also a Director in Agradooti Vanijya Pvt. Ltd. and Anushka Vanijya Pvt. Ltd, It means Shri Purshottam Khandelwal is engaged in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee company has invested the money in so called non genuine companies. vi) The payment made to assessee company by share applicant company has been seen and found that money came from one of the companies and directly gone to the account of the assessee company. This also appears to be a structured arrangement for routing the money from one company to another company.._ r vii) The companies have funded M/s. Cincom Trading Pvt.Ltd. via share application money(with premium). viti) All companies have generated majority funds via share Application money with premium. ix) No Earnings per share has been calculated by these companies. Therefore, the question arises as to why anybody will come forward to invest, that too in such a heavy ways. x) The Directors of all the companies are somewhat same and appears to be relatives. These are the persons, who are being nominated as directors and they control the 6 companies as stated above. xi) The assessee company has shown the share application money (with premium of ₹ 490) of ₹ 300.88 lakhs in its balance sheet filed before the Department for A.Y. 2011-12. The assessee company's share capital is only ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies are operating from one address and rest five operating from different address. 2. A common director Mr.Purshottam Khandelwal has been inducted after the investment into the appellant company by the two companies in which he is a director, viz. M/s Agradooti Vanijya Pvt Ltd and M/s Anuska Vanijya Private Ltd. In other words, he is nominee director on behalf of the shareholders. 3. The AO has observed that the directors of all the companies are somewhat same and appears to be relatives. It is not true as observed. There is no relation observed at list on record. 4. There is nothing on record to suggest that the companies in question are in the Business of Entries as presumed and/or alleged in the assessment order. 5. What the company has done is well within the provisions of the Companies Act, 1956 and Income Tax Act 1961. 6. There are more presumptions than facts mentioned in the Assessment order. 7. The assessing officer, has, in a confusion state of mind, has asserted that the whole arrangements has been made only for the purpose of avoiding the legitimate tax due to the state coffers. The whole arrangement needs to be viewed in relation to the tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble jurisdictional High Court decision in the case of CIT vs. M/s. Gagandeep Infrastructure Pvt. Ltd. (in ITA No. 1613 of 2014 vide order dated 20.03.2017), the said issue cannot be considered prior to the assessment year when amendment was made in the concerned section. However, as regards the A.O. s finding that these are structured companies meant for routing money in the form of share capital and share premium, has not been rebutted by the ld. CIT(A) by any further enquiry. He has simply observed that the A.O. s observations are misleading. For this, he has given the example that the A.O. has mentioned that majority of the companies are operating from one or two addresses. However, he found that the only two companies are operating from one address. Further, he has found that there is only one common director in two companies and there is no other common shareholding directorship or relationship. 13. Upon careful consideration and going through the records, we find that from the records it is emanating that one person Shri Rajkumar Saraswat who is director and shareholder in one company namely Anuska Vanijya P. Ltd. is also a director in another company name ..... X X X X Extracts X X X X X X X X Extracts X X X X
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