TMI Blog2020 (8) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... pany operated from the said address. CIT(A) is quite correct in observing that in case of a private limited company if a person is contributing so much money in share application and share premium the assessee company was obliged to give the correct whereabouts of the said company. We find ourselves fully in agreement with the above findings. When it has been categorically proved that there is no physical existence of the said company at the given address the submission of the assessee that his submissions regarding papers submitted in this regard should be given precedence over the actual fact about the non-existence of the said party is absolutely unsustainable. It is settled law that revenue authorities are not supposed to put on blin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith respect to the receipt of share application and share premium from M/s. Bharosemand Commodities Pvt. Limited, Kolkata, the assessing officer made enquiries through DIT, Kolkata. It was found that the said company is not at all in existence at the said address. The assessing officer asked the assessee to respond. In absence of cogent explanation from the assessee about the very existence of the said company the assessing officer proceeded to add the said sum of ₹ 45,00,000 as share application and share premium to be unexplained cash credit under section 68 of the IT act. The findings of the assessing officer in this regard are as under :- 5.6 In order to substantiate the genuineness of the transaction and its true nature, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... floor Kolkatta 7000072 is carried out on 16/03/2015.The said party was not found in the given address, when enquired from the people of the locality about the above mentioned party, they stated that no such company operates from the said premises, Hence the verification of party could not be done. Thereafter on 23rd march 2015, during the course of assessment proceedings assessee's representative hah been intimated about the results of the enquiry and intimated to the assessee company for its response. It was also instructed to produce the persons (directors) for verification................................. [Evidence produced or not produced............... Identity established or not Capacity and credit worthiness - no bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to prove the existence of the said company. In absence of the same learned CIT(A) upheld the order of the assessing officer. The findings of the learned CIT(A) in this regard reads as under :- I have carefully perused the assessment order and the submission of the appellant. The appellant has argued that share premium is a capital receipt and hence not income. I do not find merit in the submission of the appellant. There are various instances wherein the addition on account of receiving of monies in the garb of share premium is confirmed by various judiciary authorities. Hence, it cannot be said that once it is accounted for in the books as share capital/share premium it is a capital receipt. In the case of Vodafone India Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstances, it is found that there are shell companies and they just file the return of income and also make the compliance to the concerned authority but there is no genuine business and they are also not available on the given address. In my opinion, the appellant should have given the correct address and the name and address of the concerned persons of the said entity. The appellant company is a private limited company and in such circumstance it cannot said that it has no knowledge about the said investor. In the private limited company, the outsider rarely invests. The investor parties can invest if it has knowledge about the future progress of the company and, such things are available to the closely held persons only. But, it seems tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xmann.com 22 (Bombay HC) Pr CIT vs Paradise Inland Shipping (P) Ltd. 84 taxmann.com 2017 (Bom HC) 9. Per contra learned departmental representative supported the orders of authorities below. 10. Upon careful consideration we find that the share application money has been received from 16 parties. In case of one party in this case there is no proof at all about the existence of the said party which had contributed the said share premium and share application amount. We note that assessing officer has made the necessary enquiry through income tax office Kolkata. The said party was found to be not at all existing at the said address. The enquiry from the nearby persons also indicated that no such company operated from the said addre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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