TMI Blog2020 (2) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... e statement of the supervisor who is not aware about the creditworthiness or genuineness of the transaction. We also failed to understand that when the directors were required to be produced, how the authorised representative could be produced in lieu of those directors. CIT (A) according to us has grossly erred in accepting the statement of authorised representative. He has also merely gone by the judicial precedents without looking at the fact that all these company who have invested with the assessee does not have adequate source of income as they are showing meager income. Those companies do not have any interest of any appreciation in the share value of the Assessee Company as well as receipt of any dividend from the assessee company. Assessee is a private limited company how it approached so many of the subscribers in different geographical locations and how they were convinced and on what conviction they invest in assessee company of such huge magnitude. AO has made the addition apart from other things the fact that despite repeated opportunities the assessee has failed to produce the directors of investor companies. The ld CIT (A) deleted the whole addition of non-Kol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses involved in this bunch of appeals. 2. ITA No 1936 / del/2016 is filed by the ACIT, New Delhi (AO) against the order of the ld CIT (A)-25, New Delhi dated 31.12.2015 for Assessment Year 2011-12. 3. The revenue has raised the following grounds of appeal:- 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition u/s 68 made on account of unexplained share capital received from 9 persons [ excluding the two directors] amounting to ₹ 92500000/- - without appreciating the fact that neither the creditworthiness of these creditors nor the genuineness of transactions were established as submitted by the AO in Assessment Order and Remand Report. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in holding that the onus of the assessee is discharged without appreciating the judgement of the jurisdictional High Court given in case of CIT v. Nova Promoters (2012) 342 ITR 169 (Delhi) wherein the Hon ble Court has held that by merely filing confirmations, ITRs etc. the identity, creditworthiness and genuineness of transaction are not established a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the addition to the extent of ₹ 8,27,00,000/- being the amount of share capital by treating it as alleged unexplained cash credit u/s 68 is bad in law and against the facts and circumstances of the case, more so when there was no incriminating material was found during the course of search and more so when the impugned year was the first year of the assessee company. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the addition to the extent of ₹ 8,27,00,000/- made by Ld. AO without observing the principles of natural justice. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234A, 234B and 234C of Income tax Act, 1961. 5. Brief facts of the case shows that the assessee is a company engaged in residential and commercial project development in Uttar Pradesh who filed its return of income at Rs. Nil. A search and seizure u/s 132 of the Act in M/s. Paramount, Gulshan Ajnara Group of cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that neither the creditworthiness with respect to the shareholder was proved and nor the genuineness of the transaction was proved. It was further stated that despite repeated reminders the assessee could not produce the share applicants. Further, the ld CIT (A) deleted the addition without examining the shareholders. Therefore, the order of the ld CIT (A) suffers from serious infirmities in deleting the addition of non-Kolkata companies. 8. With respect to Kolkata companies, he defended the order of the ld CIT (A). he submitted that the ld CIT (A) should have applied the same criteria for those non-Kolkata based companies also. 9. The ld AR vehemently supported the orders of the ld CIT (A) in case of non-Kolkata companies and stated that when the assessee has discharged its initial onus, the ld CIT (A) has correctly deleted the addition. With respect to Kolkata companies where the addition is confirmed, he submitted that on the same criteria where the ld CIT (A) has deleted the addition in case of non-Kolkata companies, the ld CIT (A) should have deleted the addition. 10. We have carefully considered the rival contentions and perused the orders of the lower authorities. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submission with respect to Non Kolkata assessee holding that assessee has discharged its onus. He confirmed the addition of Kolkata companies as per para No. 8.16 of his order against which the assessee is in appeal. 11. With respect to additions deleted by the ld CIT (A) of ₹ 10,45,00,000/- included a investment of ₹ 88 lakhs, 32 lakhs and ₹ 60 lakhs by the Director of the company, which has not been added by the ld AO. However, the ld AO made additions of the entire share application money therefore; there is an anomaly in the order of the ld AO. With respect to the non Kolkata based companies the ld CIT (A) noted that during the remand proceedings the ld AO issued summons u/s 131 of the Act to M/s. Sunshine Infra Corporation Ltd but he also noted that there was a compliance by that company and only issue was with respect to the fact that the director has not appeared. The ld CIT (A) has deleted the addition merely for the reason that the ld AO did not specify which director is to be presented. In case of M/s. Sunshine Infrabuild Pvt. Ltd at the Page No. 87 of the order of ld CIT(A) the assessee produced supervisor of that company and his statement was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors clearing suspicion about their creditworthiness and genuineness of the transaction the addition could not be deleted. 13. In view of the commitment of both the parties stated above, we set aside the appeal of the revenue as well as of the assessee back to the file of the ld AO with a direction to the assessee to prove the identity, creditworthiness of those depositors as well as genuineness of the whole transactions. The assessee is specifically directed to produce directors of the companies who are investors in the assessee company before the ld AO within four months from the date of this order. The ld AO may examine the details produced by the assessee and examine the directors of all the companies to test identity, creditworthiness of their investment as well as genuineness of the transactions. Assessee may substantiate its claim by producing any further evidences, which it could not produce before ld AO due to the opportunity at the fag end of the assessment proceedings; the ld AO may also conduct any such inquiry, which is required to be carried out by him. After that, ld AO may decide the issue of applicability of section 68 of the act on these appeals afresh in accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the learned CIT AB addition was retained to the extent of only ₹ 40 lakhs and the balance addition was deleted. Therefore, both the parties are in appeal. 20. Both the parties confirmed that the facts are identical to the issue decided in case of fusion Conbuild private limited, their arguments are also similar and their assurance of producing the shareholder of the investor companies stands. Therefore, for the similar reasons given in the appeals of both the parties in case of fusion Conbuild private limited, we set aside the appeal of the revenue as well as the assessee to the file of the learned assessing officer with similar direction as given therein to the file of the learned assessing officer. 21. Accordingly, reversing the order of the learned CIT A, the appeal of the assessee as well as of the revenue are allowed for statistical purposes. 22. Now we come to the appeal of assessing officer in Mount Echo buildable private limited for assessment year 2006 07 in ITA number 1397/del/2016 and cross objection of the assessee in 175/del/2016. 23. The facts in the case shows that the learned assessing officer noted during the course of assessment proc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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