TMI Blog2016 (6) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... ee company and decide the issue after providing adequate opportunity of hearing to the assessee. The assessee is at liberty to furnish necessary evidences either documentary or by producing Shri Vakil, to prove the genuineness of the investment made by him and also his creditworthiness.- Ground raised by the Department is partly allowed for statistical purposes. - ITA no.4836/Mum./2011, Cross Objection no.26/Mum./2014 (Assessment Year : 2007–08) - - - Dated:- 30-6-2016 - Shri Saktijit Dey, Judicial Member And Shri Ramit Kochar, Accountant Member Revenue by: Shri B.S. Bisht Assessee by: Shri Mishir Naniwadekar ORDER Saktijit Dey, The aforesaid appeal at the instance of the assessee is directed against the order dated 21st January 2011, passed by the learned Commissioner (Appeals)-13, Mumbai, for the assessment year 2007 08. ITA no.4836/Mum./2011 The only effective ground raised by the Department is as under: On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in deleting the addition of ₹ 8,12,44,700, made by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cash credit under section 68 of the Act. Accordingly, he added back the amount of ₹ 8,12,44,700, as income from other sources. Being aggrieved with the additions so made, assessee preferred an appeal before the learned Commissioner (Appeals). 3. In the course of appeal hearing before the learned Commissioner (Appeals), it was submitted by the assessee that the amount received towards share application money was from genuine and identified source, hence, cannot be treated as unexplained cash credit. To prove the identity of the share applicant Shri Vakil, the assessee produced photocopy of his passport and a net worth certificate issued by a Chartered Accountant. It was submitted by the assessee that all the remittances were from the NRO account held by Shri Vakil with J K Bank Ltd., Srinagar, which has been certified by the bank as genuine and Know Your Customer (KYC) compliant. The assessee submitted, the Assessing Officer without bringing any material on record to establish that the transactions in the NRO account maintained with J K Bank Ltd., by Shri Vakil are not genuine or were from undisclosed source, cannot treat the share application money as unexplaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nking channel it does not prove the genuineness of the transaction and the creditworthiness of the creditor. Learned Departmental Representative referring to the newly inserted proviso to section 68 of the Act, submitted, as per the said proviso, the burden is on the assessee to prove that investment towards share application money / share capital / share premium is from genuine sources. 5. Learned Authorised Representative on the other hand submitted, out of the total share application money of ₹ 8,12,44,700, an amount of ₹ 5,18,44,700, admittedly was not received during the impugned assessment year, hence, under no circumstances, such amount can be added in the impugned assessment year. As far as the balance amount of ₹ 2.94 crore is concerned, learned Authorised Representative submitted, the amount has come from NRO account held by Shri Vakil, with J K Bank Ltd., which is certified by the concerned bank as genuine and KYC compliant account. He further submitted, to prove the identity and creditworthiness of Shri Vakil, assessee has also submitted copy of passport and his net worth certificate from a Chartered Accountant. Thus, it was submitted the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. However, none of these documents conclusively prove either the creditworthiness of Shri Vakil, or the genuineness of the transaction. Though, it may be a fact that the assessee received the amount of ₹ 2.94 crore from NRO account of Shri Vakil, however, that itself does not prove the genuineness of the investment in share application money by Shri Vakil. As could be seen, in course of assessment proceedings, the assessee did not furnish enough evidence to prove the creditworthiness of Shri Vakil, and genuineness of the transaction Even during the remand proceeding, though, the Assessing Officer had called for the income tax and wealth tax return copies of Shri Vakil, to ascertain his creditworthiness and had also requested the assessee to produce Shri Vakil, the assessee had neither produced Shri Vakil, nor submitted income tax or wealth tax return copies. On a perusal of balance sheet of the assessee as on 31st March 2007, a copy of which is at Page 69 of the paper book, it is noticed that out of the total fund of ₹ 8,95,74,203, available with the assessee, the major part came from the investment in share application made by Shri Vakil. Therefore, a heavy burden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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