TMI Blog2019 (8) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... rial contradicting the confirmations made in the remand report as well as subsequent assessment order for the assessment year 2012-13. Nothing has been brought on record and therefore, we do not find any perversity or illegality in the order passed by the ld. CIT(A). See FAIR FINVEST LTD [ 2012 (12) TMI 170 - DELHI HIGH COURT] - Decided in favour of assessee. - ITA No.347/Agr/2017 - - - Dated:- 30-7-2019 - Shri Laliet Kumar, Judicial Member And Dr. Mitha Lal Meena, Accountant Member Appellant by: Sh. Waseem Arshad, Sr. DR Respondent by: S/Sh. Rajendra Sharma And Manuj Sharma, Advocates ORDER Per Laliet Kumar, J.M.: This appeal is being filed by the Revenue feeling aggrieved by the order passed by the ld. CIT(A) on 09.05.2017 for the assessment year 2011-12 on the following ground : 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and in fact in deleting the addition of ₹ 1,31,50,000/- on account of unexplained credits in the form of share application money, in spite of the facts on records that the assessee has failed to produce any admissible evidence during the course of assessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Delhi-92 AAACA2172J 22,00,000 3 Spam Amusement Pvt Ltd D-25A, Laxmi Nagar, Delhi AACOS2000B 22,00,000 4 Shree Balaji Sainath Buildwell Pvt Ltd B-1058, Shastri Nagar, Karol Bagh, Delhi AAJCS7086E 2,00,000 6 Happening Motor Pvt Ltd U-18, Upadhyay Block, Shakarpur Block, Delhi-92 AAACH4607F 20,00,000 7 BGR Fabricon India Pvt Ltd. A-115, Ground Floor, Shakarpur, Delhi. AABCB8092K 13,50,000 8 R. J. Fabtax Pvt Ltd A-115, Vakil Chamber Shakarpur, Delhi-92. AADCR3947D 6,00,000 9 Sten Bernie Surgical Laser Pvt Ltd D-25, First Floor, Laxmi Nagar, Delhi-92. AAICS0183K 26,00,000 10 ANJ Forex Services Pvt Ltd. A-215, Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,31,50,000/- received by the assessee company, during the year under consideration, in form of share application money and share premium are treated as unexplained credits of the assessee u/s 68 of the Income Tax Act and are added to the total income of the assessee for the year under consideration. 3.11. Penalty proceedings are separately being initiated for concealment of income / furnishing inaccurate particulars of income. (Addition of ₹ 1,31,50,000/-) 3. The assessee feeling aggrieved by the order passed by the Assessing Officer preferred an appeal before the Commission. Before the Commissioner, the assessee had filed various written submissions and also filed documents. In all fairness, the ld. Commissioner has forwarded the documents to the Assessing Officer seeking his comments/remand report. The Assessing Officer vide letter dated 03.04.2017 had submitted the remand report and in the remand report, which is part of the appellate order, at page 30 it was mentioned as under : Ground No. 1. Addition of ₹ 1,31,50,000/- on account of unexplained share application money received. Reply of ground No. 1. On going through the record, it has been noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence, if any, to prove the genuineness of the transactions. The finding of the Assessing Officer that the transaction of share application was not based on any formal valuation carried out by the assessee company, for determination of its share price; that the assessee company had no expansion plans which made it call for such substantial investment; and that the assessee company was in no requirement of cash of working capital so as to invite such an investment and the share applicants were closely related did not by itself prove that the credits appearing in the books of the appellant company in the form of share application money and share premium represented its income of the financial year relevant for the assessment year under consideration. Though the share applicants apparently did not respond to notices under sec. 133(6) of the Act, it is evident that during the course of remand proceedings letters have also been issued to all the ten share applicants and all the applicants have confirmed to have share application except one applicant namely Shree Balaji Sainath Build well Pvt. Ltd, though the assesseee has claimed to have received share application amounting to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Del. HC (iii). ITO vs. Babu Lal Jain, 116 TTJ Jab-741-ITAT Jabalpur (iv). Cornerstone Property Investments Pvt. Ltd. vs. ITO-ITAT Bangalore (v) CIT vs. M/s. Soni Hospital Pvt. Ltd. ITA No. 588/Jp/2011-ITAT Jaipur 4.1. On the basis of the above said, it is submitted that the deletion of the additions made by the first appellate authority is without any basis and is therefore, required to be reversed by this Tribunal. 5. Per contra, the ld. AR had submitted that the requirement of law had duly been complied by the assessee which has been verified by the Assessing Officer in the remand proceedings. The confirmations as recorded by the Assessing Officer in the remand proceedings is forming part of the order of ld.CIT(A). However, our attention was drawn to paper book filed by the assessee where the assessee has compiled the following documents : (i). Confirmation letters (ii). ITRs for the assessment year 2012-13 and 2011-12 (iii). Copy of bank account relevant to the transactions in respect of all the 10 companies. 5.1 On the basis of the above, it was submitted that the assessee has brought on record the necessary and sufficient evidence to satisfy that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). That the assessee had provided the copy of application forms for share application money; (ii). That the assessee had provided its bank account in which share application money was credited; (iii). Names and addresses of the share applicants were provided; (iv). PANs of share applicants were provided; (v). In the remand proceedings, the Assessing Officer had confirmed that nine applicants except Shree Balaji Sainath Buildwell Pvt. Ltd. (Sl. No. 4) had confirmed the share applications made by them. 7.1 The Assessing Officer in the remand report has not brought on record or otherwise after issuing notices u/s. 133(6) to the said share applicants that the companies were having the sufficient funds in their account before making application for allotment of shares. The AO has not brought on record that the cash amount was deposited in the bank account by these share applicants before applying for the allotment of shares. The AO has also not brought on record that the money belonging to the assessee have been routed by way of share application money through conduit of these share applicants. In our considered opinion, once the share applicants (9) were traceable, their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral inference to be drawn from the reading of the investigation report and the statement of Mr. Mahesh Garg. To elevate the inference which can be drawn on the basis of reading of such material into judicial conclusions would be improper, more so when the assessee produced material. The least that the assessing officer ought to have done was to enquire into the matter by, if necessary, invoking his powers under Section 131 summoning the share applicants or directors. No effort was made in that regard. In the absence of any such finding that the material disclosed was untrustworthy or lacked credibility the assessing officer merely concluded on the basis of enquiry report, which collected certain facts and the statements of Mr. Mahesh Garg that the income sought to be added fell within the description of Section 68. 8. The ld. DR had relied upon the following judgments in the synopsis : (i). CIT vs. M/s. Vacmet Packaging (India) Pvt. Ltd. (Alld. HC) (ii). CIT vs. Ultra Modern Exports Pvt. Ltd.(ITA No. 262/2012 Del. HC (iii). Cornerstone property Investments Pvt. Ltd. vs. ITO dated 09.02.2018 (ITAT Bangalore) (iv). DCIT vs. M/s. Soni Hospital Pvt. Ltd.(ITA No. 588/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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