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TMI Blog2020 (1) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... l as in Law, the learned CIT(A) has erred in confirming the action of Learned Assessing in reopening the assessment under section 147 of the Inco me Tax Act, 1961, without considering the facts and circumstances of the case. case." 3. The learned Counsel for the assessee stated the facts that the assessee filed its return of income on 30.09.2009 declaring total income of Rs. 1,14,92,500/- and this return of income was processed under section 143(1) of the Act. Subsequently, on perusal of information received from the office of CCIT (CCA), Mumbai, the AO noticed that the assessee has raised share premium of Rs. 2.88 crores and for that he issued notice under section 148 of the Act dated 30.03.2014. The assessee in response to this notice stated that the assessee filed its return of income on 30.09.2009 by treating as return filed in response to notice under section 148 of the Act vide letter dated 19.05.2014. The assessee required the AO to provide reasons for reopening of the assessment and AO provided copy of reasons recorded which are reproduced in the assessment order and read as under:- "The assessee company has been incorporated on 03/04/2008. The assessee has filed its fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the only dispute is regarding share premium received at the rate of Rs. 90 per share but he could not point out how the reasons recorded are not as per the provisions of section 147 of the Act. For this limited aspect, the assessee has made argument. Hence, we find no infirmity in the reopening made by AO and confirmed by CI T(A). Hence, this reopening is upheld and this issue of assessee's CO is dismissed. 6. Coming to Revenue's appeal, the only issue in this appeal of Revenue is against the order of CIT(A) deleting the addition made by the AO of amount of Rs. 3.68 lakhs on account of unexplained cash credit under section 68 of the Act being share capital and share premium. For this, Revenue has raised the following grounds:- "1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in ignoring the fact that the assessee company failed to submit details of directors of the companies to which shares were issued even after specifically being asked to do so by the AO and thus failed to discharge its onus to establish the Identity and creditworthiness of the share applicants and the genuineness of transaction. 2. Whether on the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and genuineness, there is no doubt that the money was received through banking channels, but did not reflect actual genuine business activity. The share subscribers did net-have their own profit making apparatus and were not involved in business activity. They merely rotated money, which was coming through the bank accounts, which means deposits by way of cash and issue of cheques. The bank accounts, therefore, did not reflect their creditworthiness or even genuineness of the transaction." 8. Aggrieved assessee preferred the appeal before CIT(A), who deleted the addition after considering the submissions, case records and facts of the case by observing in Para 4.6 to 4.8 and 4.12 as under :- 4.6 As regards ground no. 2.1 have gone through the assessment order and submissions made in this regard. It is noted that the Assessing Officer doubted the increase in the share capital and share premium of Rs. 3,60,00,000/- and treated the same as unexplained cash credit u/s. 68 of the Income Tax Act, 1961. The appellant has stated in its submissions that the action of the AO to treat these shareholders as non-existent is arbitrary and is based on surmises and conjectures and is contrad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. The assessee has filed copy of PAN card, bank Statement, balance sheet and P&L account, Share Application Form, etc. of shareholders. It emerges out from the record that the investing shareholders had recorded the investments in appellant company. In their books of accounts during the relevant financial year. Thus, the shareholders had demonstrated these balances in their balance sheets in the shape of investment as well as loan and advances. The next issue is about the genuineness of the transaction. The assessee has produced the details of bank account. The share application money and share premium had been issued through banking channel. There is no cash transaction which could compel oneself to assume that the transactions were hot genuine. The AO has made the addition on the issue that the shares were issued to shareholders at high premium and the subscribing shareholders had meagre income during the yea- hence the entire transaction was to be treated as unexplained cash credit U/s 68 of Income Tax Act. The onus cast upon the assessee under Section 68 of the Act is to satisfy the department about the true identity of an investor, its creditworthiness and genuineness of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 10. We noted that the assessee has submitted the names and address of the al l the shareholders as per the latest information available with the assessee. Further, we noted that the assessee has submitted all the relevant information like copy of share application form (confirmation), their PAN numbers, bank statement of these shar e holders, audited balance sheet in the case of these share holders wherever these are companies. Further, the assessee also submitted information in the shape of income tax returns, memorandum of association and articles of associations of these companies before the AO and CIT(A). 11. From the above chart, it is clear that the list No. 1 to 4 Shri Sharad Rathi and Mrs. Charu Rathi, they are directors of the company and they have filed documentary evidences in the form of investing in shares. Further, the assessee has filed the bank statement of Mrs. Charu Rathi from where these investments were made at assessee's paper book page 4 and 5 and complete details of investment made amounting to Rs. 20 lakhs is explained. The Rs. 19 lakhs was invested by cheque no. 75673 on 06.10.2008. Further, a sum of Rs. 1 lakh was transferred vide cheque no. 309636 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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