TMI Blog2019 (7) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... gwith this copy of account, balance-sheet income-tax return. There is further no quarrel that they are assessed in the same jurisdiction. The assessment order dated 23.03.2015 in this regard indicates that AO nowhere dealt with all these details before terming the amount in issue to be non-genuine levying to sec. 68 addition. We therefore take into consideration all these peculiar facts to hold that the assessee has duly proved identity, genuineness and creditworthiness of the impugned share capital to have come from its director / managing director. The same is ordered to be deleted. - ITA No.2250/Kol/2018 - - - Dated:- 17-5-2019 - Shri S.S.Godara, Judicial Member And Dr. A.L. Saini, Accountant Member For the Appellant : Shri H.V. Bhardwaj, FCA For the Respondent : Shri Shankar Halder, JCIT-SR-DR ORDER PER S.S.GODARA, JUDICIAL MEMBER:- This assessee s appeal for assessment year 2012-13 arises against the Commissioner of Income Tax (Appeals)-1, Kolkata s order dated 05.09.2018 passed in case No.18161/CIT(A)-1/Kol./Cir.-1(2)/2015-16, involving proceedings u/s 143(3) of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the submissions, it is observed that the expenses were incurred for installation of the Bokaro Site and although details of expenses were filed, no basis for disallowance was given by A.O. I am of the view that it is well settled that the onus to establish genuineness of expenses lies squarely upon the assessee which was not discharged as only break-up of Bokaro Site Expenses vide copy of ledger a/c has been filed. However, expenditure of ₹ 1,55,182/- and ₹ 7,93,336/- were claimed as Bokaro Site Expenses and labour charges. The other expense as ₹ 62,890/- i.e. Machine Rent, Security Expenses, Tea Tiffin expenses. Since the appellant ought to have incurred some essential expenses for material at the site, it would be reasonable to restrict full disallowance of 50% out of ₹ 9,49,518/- for Bokaro Site and labour charges i.e. ₹ 4,74,759/- which I confirmed. The appellant gets relief to the extent of ₹ 25,241/- (₹ 5,00,000 minus ₹ 4,74,241/-). This ground is partly allowed. 5. It is therefore clear that the CIT(A) has restricted full disallowance to 50% for Bokaro site and labour expense without any drawing comparis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash credits u/s. 68 of LT. Act, 1961.It was thus concluded by the A.O that as the identity of the creditor was not established, the genuineness and creditworthiness of the said share subscriber/allottee was not satisfactorily explained and added back the amount of ₹ 32,50,000/- u/s. 68 of the IT. Act. The appellant has made written submissions as under : Perhaps due to ongoing decision of Department to add share capital addition, mostly on premium, from bodies corporate, whose credit worthiness and identity is doubtful. A.O has made this addition without total lack of application of mind. In our case we took loan from time to time from our Managing Director, since the formation of the company. Due to Bank's requirement, for increase in capital we I had to increase share capital. Hence, entire amount received during the year ₹ 32,50,000/- by cheque ₹ 30.00 Lacs and ₹ 2.50 Lacs converted into share capital. His identity, credit worthiness and genuineness of transaction are proved beyond doubt. A.O. asked to produce a Director, one Director appeared as well. But A.O never asked t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a cash credit i.e identity, mode of receipt and credit-worthiness / sources of the cash creditors, the impugned transactions i.e. Unsecured Icans cannot be treated as genuine. On the issue in dispute, the hon'ble The Supreme Court in Vijay Kumar Talwar v. CIT [2011] 330 ITR 1/ 196 Taxman 136 [2010] 8 taxmann.com 264 (SC) the same principle was applied in the following observations : 24 .... AII the authorities below, in particular the Tribunal, have observed in unison that the assessee did not produce any evidence to rebut the presumption drawn against him under Section 68 of the Act, by producing the parties in whose name the amounts in question had been credited by the assessee in his books of account. In the absence of any cogent evidence, a bald explanation furnished by the assessee about the source of the credits in question viz., realisation from the debtors of the erstwhile firm, in the opinion of the assessing officer, was not satisfactory. It is well settled that in view of Section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year, the same may explanation offered by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in Sajan Dass and Sons v. CIT [2003] 264 ITR 435 (Delhi) wherein the Hon'ble Delhi High Court held that mere identification and showing movement through banking channels is not sufficient. Similar view was taken in Sandeep Kumar v. CIT (293 ITR 294) (Del), Jaspal Singh 290 ITR 306 (P H), Yash Pal Goel , 310 ITR 75/76(P H) and Rajeev Tandon vs. Assistant Commissioner of Income Tax in ITA No. 77 of 2007 dated 13.7.2007 as also in Subhash Chander Sekhri v. Deputy CIT [2007] 290 ITR 300 (P H).In the present case also, it is not established that two subscribers to the share capital of the appellant company by the two companies which were found to have meagre cash balances/capital in their books of accounts had capacity to make the loans. Therefore, the A.O was justified in upholding the addition of the amount claimed as impugned unsecure loans. In Ram Lal Agrawal v. CIT [2006] 280 ITR 547 (All), the Hon'ble Allahabad High Court held that where there is a finding given by the Income-tax authorities that creditworthiness of depositors was not proved, the amount could be assessed as income of the assessee. In Sunil Siddharthbhai v. CIT [1985] 156 ITR 509 (SC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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