TMI Blog2020 (2) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... rima-facie material to prove the creditworthiness and genuineness of transactions. In such circumstances, non-production of directors, without bringing any contrary material on record, cannot be adversely viewed against the assessee - there is no infirmity in the order of the Ld. CIT (A) vide which, after considering all these evidences, the impugned addition made on account of share application money and premium has been deleted. Unconfirmed unsecured loans - Copy of bank account of creditor is placed and copy of ITR for A.Y. 2012-13 showing income of ₹ 6,40,525/- is placed and the audit report for the year under consideration has been placed . Similar reply has been filed in respect of the other two creditors namely M/s Franklin Leasing and Finance Pvt. Ltd. and M/s RKG Finvest Ltd. It is also seen that to all these creditors, interest has been paid by the assessee after due deduction of tax at source and repayment has also been made through banking channels. In the case of M/s Franklin Leasing and Finance Pvt. Ltd, the evidence of repayment of loans have been filed and in the case of M/s RKG Finvest Ltd such evidence has been filed at pages 212 to 215. Further, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in the assessment order are reproduced below: Unconfirmed share capital/premium A perusal of the assessee's Balance Sheet reveals that the assessee company has received share capital/share premium during the year amounting to ₹ 1,00,00,000/- from following companies: - S. No. Name of the company from whom share application received during the year Amount 1. M/s M/s Bhavtarani Sales Pvt. Ltd. ₹ 15,00,000/- 2. M/s Chaturbhuj Agencies Pvt. Ltd. ₹ 15,00,000/- 3. M/s Toor Finance Company Ltd. ₹ 10,00,000/- 4. M/s VemuriFinvest Pvt. Ltd. ₹ 60,00,000/- Total ₹ 1,00,00,000/- Unconfirmed unsecured loans Apart from the above, on perusal of the assessee's Balance Sheet reveals that the assessee company has also received unsecured loans amounting to ₹ 57,00,000/- from following compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which included the acknowledgment of ITRs for A.Y. 2012-13; confirmed copy of account of the parties; source of investment made by them and also the bank account details. From these details, the AO has observed that the share applicants/lenders were not having sufficient income as per the ITRs filed by them and that they were having meagre income. It was further submitted that some of the notices issued by the AO u/s 133(6) of the Act were initially returned back by the postal authorities with remarks 'no such person on mentioned floor or room no' and 'unclaimed'. Thereafter, the assessee had submitted the fresh addresses and replies were received. It was further submitted that the AO had also made inquiries through the inspector of income tax in some of the cases who had reported that at the specified addresses the companies were not found to be working and although some person was present there. Therefore, the Ld. Sr. DR submitted that the AO was right for making addition of ₹ 1,57,00,000/- and the Ld. CIT (A), without appreciating the facts discussed by the AO in the assessment order, has wrongly deleted the addition. She also placed reliance on the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. to Limited company Repayment Pages 201 to 207 Certificate of NBFC issued by RBI Page 184 3. M/s RKG Finvest Ltd. Page 80 Letter dated 15-10-2014 asking the same information as above Page 81 submitting all the information Reply dated 28-10-2014 Page 82 For the period of 01-04-2011 to 31-03-2012 Pages 83-84 Acc. No. 024810 200000 5265 Page 107A Dated 29-09-2012 Pages 85-107 Pages 216 to 218 Pages 182 to 183 Assessment Order dated 08-08-2014 Repayment Pages 212 to 215 Certificate of NBFC issued by RBI Page 185 EVIDENCE OF SHARES AND PREMIUM S. No. Names 133(6) Reply Bank Account ITR Audited Others 1. M/s VemuriFinvest Pvt. Ltd. Page 108 Letter dated 05-01-2015 ( a ) Copy of details of transactions during 01-04- 2011 to 31-03- 2012 ( b ) Copy of bank statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the assessee for that year evidencing the fact that such repayment was made through banking channels. 4.2 It was submitted by the Ld. AR that the assessee has filed the relevant details such as copy of ITR; confirmed copy of account and also bank accounts and, thus, the assessee had discharged the initial onus laid upon it. The AO, not being satisfied with such information furnished by the assessee, has made his own inquiries by sending notices to each of the share applicants/lenders u/s 133(6) of the Act and though, initially, some of the notices issued by AO u/s 133(6) had been returned back but after the assessee having provided fresh addresses to the AO, the replies were duly received by the AO directly from all the share applicants/lenders. The Ld. AR submitted that the AO still being not satisfied with such evidences, had asked the assessee vide letter dated 20-03-2015 to produce Principle Officers/ Directors of the share applicant companies/lenders companies. He submitted that the said notice was served on the assessee only on 24-03-2015 and the date was given for 26-03-2015. He submitted that when the assessee had already placed on record the evidences to prove the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has submitted the reply in response to the independent inquiries conducted by the AO through notices sent u/s 133(6) of the Act. 4.5 The Ld. AR submitted that the Ld. CIT (A) has also given findings that perusal of financial statement of the lender company reveals that all these companies are engaged in the business activities and all of them were assessed to income tax. The Ld. AR in this regard referred to the findings recorded by the Ld. CIT (A) in Para 3.2 to 3.3.2.9. 4.6 The Ld. AR submitted that in respect of share capital including premium, the Ld. CIT (A) has given a finding that the share capital and premium is received by the assessee through proper banking channel and the assessee has submitted the confirmation of accounts; copy of ITR; bank statements; financial statements and ROC particulars of these companies and all of them are assessed to tax. The AO conducted independent inquiry by sending notices u/s 133(6) which were dully served on all of these four companies who confirmed the amount of investment and also submitted the required details. In respect of inquiries conducted by inspector, the Ld. AR drew our attention towards the finding rendered by the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt made in the above said company d. Please furnish your assessment particulars along with audit report and balance sheet along with its annexure for the relevant year. 5.1 In response of such notice the information has been submitted by the share applicant vide letter dated 13-01-2015. The reply submitted by the share applicant is as under: - With reference to your notice u/s 133(6) in case of M/s. Commitment Financial Services Pvt. Ltd., we submit as under: 1. We have made investments to the extent of ₹ 60,00,000/- in the equity shares of M/s. Commitment Financial Services Pvt. Ltd. 2. Details of amounts given as share application money are attached herewith. Date Bank Mode Amount in Rs. 19.04.2011 Kotak Mahindra Bank RTGS 10,00,000/- 19.04.2011 Kotak Mahindra Bank RTGS 25,00,000/- 19.04.2011 Kotak Mahindra Bank RTGS 25,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Principal Commissioner of Income Tax v. Himachal Fibers Ltd (supra) which has been confirmed by dismissal of the SLP in the case of Principal Commissioner of Income Tax v. Himachal Fibers Ltd (supra). 5.4 Keeping in view the above position, we are of the opinion that there is no infirmity in the order of the Ld. CIT (A) vide which, after considering all these evidences, the impugned addition of ₹ 1,00,00,000/- made on account of share application money and premium has been deleted. 5.5 Now, coming to the addition on account of unconfirmed unsecured loans, the Ld. AR had submitted the chart in respect of these loans and it is seen that similar notices u/s 133(6) of the Act have been issued by the AO to each of the creditors. For example, in the case of M/s Nachiketa Finvest Pvt. Ltd, copy of such notice has been placed on page 36 of the paper book and the notice is dated 05-01-2015. The reply submitted by M/s Nachiketa Finvest Pvt. Ltd is dated 12-01-2015 and the reply is as under: - With reference to your above mentioned notice we wish to submit as under: - 1. We, Nachiketa Finvest Pvt. Ltd. had given loan of ₹ 35,00,000/- (Thirty Five Lacs onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance brought forward in F.Y. 2013-14 has been paid along with interest of ₹ 17,290/- on which TDS deducted is ₹ 1,729/- and repayment of ₹ 3,02,414/- is made on 13-02-2014 through RTGS. Similarly, the evidence of repayment has been filed in respect of the other two creditors. In the case of M/s Franklin Leasing and Finance Pvt. Ltd, the evidence of repayment of loans have been filed at pages 201 to 207 and in the case of M/s RKG Finvest Ltd such evidence has been filed at pages 212 to 215. Further, in the case of M/s RKG Finvest Ltd the assessment has been framed u/s 143(3) for A.Y. 2012-13 and copy of assessment order dated 08-08-2014 in the case of M/s RKG Finvest Ltd has been filed at pages 180 to 183. 5.7 Keeping in view the above position, we are of the opinion that there is no infirmity in the order of Ld. CIT (A) vide which, after considering all these evidences, the impugned addition of ₹ 57,00,000/- has been deleted. 5.8 So far as the decision relied upon by Ld. DR in the case of Pr. CIT v. NRA iron (supra) is concerned, we may mention that the facts of the present case are entirely different from the facts of the said case. In the said case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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