TMI Blog2020 (2) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... money in the books of accounts through the fictitious and bogus companies. On this premise we sustain the addition made by the learned Assessing Officer under section 68 of the Act. We further find that the Ld. CIT(A) had followed the procedure established under law for enhancing the additions and such additions are justified by record. Consequently, we dismiss the grounds of appeals. - ITA Nos. 4515, 4516 & 4517/Del/2015 (Assessment Years: 2010-11, 2011-12 & 2012-13) - - - Dated:- 14-1-2020 - SHRI G.S. PANNU, VICE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER Appellant by: None Respondent by: Smt. Sulekha Verma, CIT/DR ORDER PER K. NARASIMHA CHARY, J.M. Aggrieved by the common order dated 15/5/2015 in appeal Nos.68 to 70/14-15 passed by the learned Commissioner of Income Tax (Appeals)-XXVI, New Delhi ( Ld. CIT(A) ) for the assessment years 2010- 11 to 2012-13, M/s Par Excellence Leasing and Finance Services Private Limited ( the assessee ) filed these three appeals on identical grounds. Since all these appeals emanate from a common order, we deem it just and convenient to dispose them of by way of this common order. 2. Brief facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 208, Chanakya Complex, Subhash Chowk, Laxmi Nagar, Delhi 100,000 1,000,000 19,000,000 20,000,000 3 Olympus Vision P Ltd 32/34,5 Floor, Bombay Chamber, Dhobi Talao, Mumbai 50,000 500,000 9,500,000 10,000,000 4 One2e Solutions India P Ltd Mumbai 25,000 250,000 4,750,000 5,000,000 5 Oshine Investments Fin P Ltd B-501, Pushpak Aptmts, Western Exp Highway, Dahisar -East, Mumbai 175,000 1,750,000 33,250,000 35,000,000 6 Gyaneshwar Trading Fin P Ltd Mumbai 37,500 375,000 7,125,000 7,500,000 7 Sidh Housing Developers Co 75,000 750,000 14,250,000 15,000,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bioinnovations P Ltd Amritdham, Suite 5 6, Nityanand Nagar, Bakultala Kolkata 100,000 1,000,000 19,000,000 20,000,000 2 Stocknet International P Ltd Kolkata 100,000 1,000,000 19,000,000 20,000,000 Total 200,000 2,000,000 38,000,000 40,000,000 4. After noticing that the no business activities were going on at the address as given in respect of the investor companies and denoting the result of the fieldenquiries which provides that the said companies were just paper concerns which have been used for providing accommodation entries through share capital and share premium, learned Assessing Officer issued notice under section 142 (1) of the Act requesting the assessee company to provide the identity of the parties, their creditworthiness and the genuineness of the transactions. A questionnaire was also issued along with such notice. 5. Assessee s contention was th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s unexplained, and has to be added to the income of the assessee under section 68 of the Act. 8. Aggrieved by such findings of the Assessing Officer, assessee preferred appeals before the Ld. CIT(A) in respect of these three assessment years. Having considered the case on its merits on a thorough reappraisal of the material before her, Ld. CIT(A) issued notice for enhancement under section 251 (2) of the Act for all these assessment years 2010-11, 2011-12 and 2012-13 giving an opportunity of being heard to the assessee. 9. CIT(A) found that the assessee was required by the learned Assessing Officer to substantiate its claim with regard to the share capital and share premium by way of queries and was specifically asked to provide the shareholding pattern of the company, the details of share capital, share application, share transfer, name and address of shareholders and also to provide the identity and creditworthiness of the investors and also genuineness of the transaction while drawing the specific attention of the assessee towards the findings of the investigation wing, Mumbai in the case of the so-called share investors that are common to it and the Ganga Dhar S Shetty gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the manner in which the assessee responded to the queries of the Assessing Officer during the assessment proceedings, Ld. CIT(A) concluded that the claim of share capital and share premium by the assessee was bogus. Ld. CIT(A) further observed that the assessee did not bring on record the basis on which the share premium at par value of ₹ 10/-was completed at the rate of ₹ 190/-per share and the assessee did not care to explain the circumstances in which the various private entities, unrelated to it, found such a proposition attractive to commit funds running into crores of rupees, more particularly on the face of the fact that such investors had not received any written on their substantial investment, as reflected in the books of the assessee. Further considering the nonappearance of the investors before the Assessing Officer to reiterate and establish their claim, given their substantial investments in the assessee company, Ld. CIT(A) held that the test of identity of the parties was failed, the test of creditworthiness is also a complete failure and test for genuineness of the share capital and share premium contributions also collapsed on account of nonappear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Ld. DR that the decisions relied upon by the assessee before the authorities below have no relevance to the facts of the case, and more particularly in view of the decision of the Hon ble jurisdictional High Court in the case of PCIT VS. NDR Promoters Private Limited (2019) 14 ITR 379 and Hon ble Supreme Court in the case of PCIT vs. NRA Iron and Steel (P) Ltd ( 2019) 412 ITR 161, mere filing of the documents does not absolve the assessee of the responsibility of proving the three ingredients of section 68, namely, the identity and creditworthiness of the shareholders and the genuineness of the transaction. Ld. DR submitted that the authorities below consistently observed that though the assessee had completed the paperwork meticulously, no reasons are afforded for non-production of the parties. She submitted that record must be had to the fact that field queries revealed that such companies were just and proper concerns which were used for providing accommodation entries through share capital and the share premium. She drew our attention to the reasons recorded by the learned Assessing Officer at paragraph No. 3.2 of his order as to the status of these companies. She furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e supporting documents in order to satisfy himself as to the identity and creditworthiness of such companies and also about the genuineness of the transaction. In such situation, the assessee should have produced such persons for examination by the learned Assessing Officer or at least should have furnished thecurrent address and details of such persons. Without doing so, the assessee cannot insist that merely because certain documents are filed, the identity and creditworthiness of the parties and the genuineness of the transaction, ipso facto, shall be taken to have proved. 19. It is legitimate for the learned Assessing Officer to make enquiries relating to find answers to the questions like - whether the two parties are related or known to each other, or mode by which parties approached each other? whether the transaction is entered into through written documentation to protect investment? whether the investor was an angel investor? what is the quantum of money invested? how the party believed the credit-worthiness of the recipient? what is the object and purpose of payment/investment? whether the share applicant is in existence and an independent entity? how the financial ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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