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TMI Blog2020 (8) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee has received share application money of Rs. 2.00 crores from 28 persons/entities. He has noted the details viz. names of persons from whom such money was received and the amount received by the assessee from each individual. Therefore in a brief assessment order the ld.AO recorded that the assessee failed to discharge onus cast upon it by virtue of section 68, and made addition of Rs. 2.00 cores. He determined taxable income at Rs. 2,75,91,120/- as against returned income of Rs. 75,91,117/-. Dissatisfied with the assessment order, the assessee carried the matter in appeal before the ld.CIT(A). Assessee had filed application for permission to lead additional evidence. Such application was allowed and the assessee was permitted to place on record additional evidence. The ld.CIT(A) provided opportunity of hearing to the ld.AO for admission of such evidence and for rebutting evidence submitted by the assessee. The AO has submitted two remand reports, which are being reproduced by the ld.CIT(A) in para-2.4 and para-7.7 of the impugned order. On the comments of the AO, the ld.CIT(A) took explanation of the assessee also. After going through all material, the ld.CIT(A) con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PBP No. 15 to 22) 2. Atul L. Rathod B-1/2, Shayona City, Part-1, Ghatlodia, Ahmedabad ADSPR7042N 7,50,000/- 03/05/2013 Confirmation, Share Application form, PAN Card, ITR Ack., Statement of Income, Relevant extract of Bank Statement of Vijaya Bank (PBP No. 23 to 30) 3. Atul L. Rathod-HUF B-1/2, Shayona City, Part-1, Ghatlodia, Ahmedabad AAHHA6717M 7,50,000/- 26/04/2013 Confirmation, Share Application form, PAN Card, ITR Ack., Statement of Income, Relevant extract of Bank Statement of Vijaya Bank (PBP No. 31 to 38) 4. Bharat Chimanbhai Patel 8,Haridarshan Tenament, Ghodasar, Ahmedabad ARLPP4162E 7,50,000/- 30/05/2013 Confirmation, Share Application form, PAN Card, ITR Ack., Statement of Income, Relevant extract of Bank Statement of Bank of Baroda (PBP No. 39 to 46) 5. Bharat Kantilal Vaidya B-2, Shayona City, Part-1,Ghatlodia, Ahmedabad ACCPV7442B 5,00,000/- 10/04/2013 Confirmation, Share Application form, PAN Card, Relevant extract of Bank Statement of Canara Bank (PBP No. 47 to 51) 6. Dahyabhai P. Suthar B-1/12, Shayona City, Part-1, Ghatlodia, Ahmedabad AJBPS2388B 5,00,000/- 18/04/2013 Confirmation, Share Application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 10/04/2013 Confirmation, Share Application form, Relevant extract of Bank Statement of Vijaya Bank (PBP No. 109 to 112) 17. Neeraj J. Parikh 6, Shaswat Bungalow, Satellite, Ahmedabad AASPP5826F 12,50,000/- 08/05/2013 Share Application form, PAN Card. Cheque cleared in ICICI Bank CC A/c 2451000150 on 10/05/2013. (PBP No. 113 to 114) 18. Rachna Patel A-1, RamKrishna Apartments, Hirawadi, Saijpur Bogha, Ahmedabad CCRPP5743E 7,50,000/- 30/05/2013 Confirmation, Share Application form, PAN Card, ITR Ack., Statement of Income, Relevant extract of Bank Statement of Bank of Baroda, Aadhaar card (PBP No. 115 to 124) 19. Rajesh M. Makwana C/80/956, Shreenath Appartments, Nava wadaj, Ahmedabad AJPPM9595G 7,50,000/- 23/05/2013 Share Application form, PAN Card, (PBP No. 125 to 126) 20. Rajesh M. Makwana HUF C/80/956, Shreenath Appartments, Nava wadaj, Ahmedabad AAKHR1360Q 7,50,000/- 07/05/2013 Confirmation, Share Application form, PAN Card, ITR Ack., Statement of Income, Relevant extract of Bank Statement of Vijaya Bank (PBP No. 127 to 134) 21. Reena N. Parikh 6, Shaswat Bungalow, Satellite, Ahmedabad AAUPP1502C 10,00,000/- 01/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er he has not discussed anything with regard to the fact that no money was received during the year and there was only journal entry without receipt of money and the facts of non receipt of money in this year are amply proved from the bank slips of subsequent year by which these cheques were deposited and the respective entries appearing in the Bank Statements of subsequent year. The Ld. CIT(Appeals) has also neither discussed anything regarding non receipt of money during this year, nor has given any finding in this regard and the appeal order is silent on this core issue. He based his finding by extensively quoting from the decision of Nova Promoters, but didn't appreciate the decision of Oasis Hospitalities Private Limited mentioned in this very decision pointing out that when assessee produced PAN, Bank Account, Copies of ITR Returns, primary onus of assessee is discharged and addition u/s 68 was not held to be sustainable but in the case of Nova Promoters, the AO has made investigation of all the facts which in the case of assessee has not been made and hence the decision of Nova Promoters is not applicable to the facts of assessee. Therefore it is submitted that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternative submission which can be taken by the assessee, decision relied upon is Ghai Lime Stone Com. - High Court of M.P. 144 -ITR - 140 8.) When amount is not received, addition u/s 68 cannot be made. Decisions relied upon are: i) M/s Luxmi Foodgrains Private Limited - ITAT Bench "A" Chandigarh - ITA NO. 316/CHD/2019 - A.Y. 2013-14 dated 07/11/2019. ii) Jatia Investment Co. - 206 ITR 718 - High Court of Calcutta. iii) Bhagvat Marcom Private Limited - ITA No. 223 (Kol) - 178 ITD -684. iv) Mahendrakumar Agarwal - ITAT - Jaipur -142 TTJ (J.P.)(UO) -35. v) Orissa Corporation Private Limited - 159 ITR 78 (Supreme Court) 5. On the other hand the ld.DR relied upon the orders of the Revenue authorities. He submitted that the AO has made reference to the balance sheet of the assessee, where the assessee itself has cognized the receipt of money before 31st March. Therefore, it is under an obligation to explain the source of such receipt, credit worthiness of the present person from whom money was received as well as to prove genuineness of the transaction. The ld.AO has submitted detailed comments in his remand report, which has been reproduced by the ld.CIT(A), and basicall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union Co-Op 08/04/2013 28 Vishnu G Patel 397963 750,000 Canara 20/05/2013 Total Amount (Rs.) 2,00,00,000 7. On page 7 para 7.7, the ld.CIT(A) took note of identical details that contained the date of presentation of cheque also. In order to avoid the repetition, we observe that presentation of cheques is just one or two days before its clearance, i.e. in the case of Shri Alpesh C. Gajjar cheque was encashed on 4.6.2013. It was presented in the bank of assessee on 3.6.2013. Similar is the effect in other cases. There is a variation of one or two days between the presentation and encashment. A perusal of the table would indicate that all the cheques were presented after 31.3.2013 and they were encashed after 31st March. In other words, the cheques were neither presented nor encashed in the accounting year relevant to the assessment. The date of issuance of cheque is immaterial. Thus, the assessee has not received any money on account of share application during the accounting year relevant to the Asstt.Year 2013-14, and it was a notional receipt only, therefore, its source cannot be inquired in this year. A somewhat identical aspect was examined by ITAT, Chand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration at premium to certain companies in lieu of the shares held by the said companies and there was thus no inflow of cash involved in these transactions. The said transactions were entered into in the books of account of the assessee-company by way of journal entries and it did not involve any credit to the cash amount. The learned DR at the time of hearing has not brought anything on record to rebut or controvert this position. He however has contended by relying on the decision of Hon'ble Madhya Pradesh High Court in the case of V.I.S.P. (P) Ltd. (supra) as well as the decision of Mumbai Bench of this Tribunal in the case of Panna S. Khatau (supra) that section 68 was still applicable in the present case involving credit to the share capital and share premium ITA No No.316/Chd/2019 amount. It is however observed that the facts involved in the case of V.I.S.P. (P.) Ltd. (supra) were different inasmuch as the liability in question in the said case represented trading liability of the assessee accruing as a result of purchases made by the assessee during the relevant year and since the said liability was found to be a bogus liability, addition made by the AO was held to be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not applicable." 8. Since assessee has not received actual consideration, it has only received cheques which have not been encashed, therefore, the proposition laid down in the above order of the ITAT, Kolkata Bench is clearly applicable on the facts of the present case. We allow the appeal of the assessee and delete the addition." 8. The ld.DR during the course of hearing was unable to controvert the proposition laid down in these two judgments. In the present case also no actual money was received during this year. The assessee has just passed journal entry and ultimately share application was received in the subsequent year i.e. Asstt.Year 2014-15. Therefore, no inquiry could be made in this year. As far as second point raised by the ld.counsel for the assessee is concerned, i.e. whether the assessee is able to discharge of its onus of explaining the source of alleged money received by it or not; or whether this amount is required to be added with aide of section 68 or not ? In this regard we find that the assessee has filed a paper book containing 287 pages. We have taken note of all the details tabulated by the ld.counsel for the assessee in his paper book with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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