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TMI Blog2020 (11) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... ar as Unexplained Cash Credit and added to total income under section 68 of the Income Tax Act 1961 even though no incriminating documents and/or material of alleged cash paid to the Share Applicants (Investor Companies) were found during the course of search action/proceedings. The learned Assessing Officer has just acted mechanically relying upon third party statement and reference many by the Investigation Wing without taking cognizance of the seized material in his possession and other details and documents submitted by the Appellant during the assessment proceeding pertaining to the share application money received which were sufficient enough to establish the identity and capacity of the share applicants and genuineness of the transactions. The learned Assessing Officer has erred in rejecting the Retraction Statement of the Director of the Group merely on the ground that it was sworn after 10 months of the original statement given by him without appreciating the reasons for delay recorded in the Affidavit and reached to conclusion just because the Appellant did not produce the Director of the Share Applicant Companies. (b)The learned CIT(Appeal) has erred in upholding the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1956. The assessee company is engaged in the business of builders, developers and advancing of loans, advances and making Investments. The assessee company had filed its Return of Income on 27.08.2012 declaring total loss of Rs. 42,067/-. The Return was processed u/s 143(1) of the Act 1961 accepting the returned income. The assessee company's case was then selected for scrutiny proceedings. During the course of the assessment proceedings, the assessee had furnished all the information asked for by the Ld. Assessing officer for verification of share application money received during the year. Thereafter, a search action was conducted under section 132 of the Act on 05.11.2014 at the residential and business premises of Vardhman group. The case was then centralized with DCIT CC2(3), Mumbai on 26.08.2015 and notice under section 153A was issued. In response to notice under section 153A of the Act, the assessee filed return of income and notice under section 143(2) of the Act was issued. Subsequently the case was centralized with DCIT CC2(2), Mumbai. Since notice under section 153A of the Act was issued prior to centralization, the notice was void ab initio which was intimated to asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 4,350,000 4,912,500 6 Anchal Properties Pvt. Ltd. AAGCA0681A 30,000 Cheque 9,000,000 300,000 8,700,000 4,872,500 7 Yash V Jewels Limited AAACY1119P 15,000 Cheque 4,500,000 150,000 4,350,000 42,517,500 8 Atharv Business Pvt Ltd. AAACF9430A 15,000 Cheque 4 ,500,000 150,000 4,350,000 4,160,000 9 Olive Overseas Pvt. Ltd. AACCR4512K 15,000 Cheque 4,500,000 150,000 4,350,000 19,637,000 10 Sanjivani Enviro Protection Ltd. AADCS3433P 15,000 Cheque 4,500,000 150,000 4,350,000 9,215,000 11 Raghunandan Rayons Ltd. AABCR1177R 15.000 Cheque 4,500,000 150,000 4,350,000 27,928,610 12 Ansh Merchandise Pvt. Ltd. AABCN8176E 15,000 Cheque 4,500,000 150,000 4,350,000 4,815,000 13 Kush Hindustan Entertainment Ltd. AACCK3597M 15,000 Cheque 4,500,000 150,000 4,350,000 31,750,000 14 Josh Trading Pvt. Ltd. AACCJ4233H 15,000 Cheque 4,500,000 150,000 4,350,000 5,000,000 15 Viraj Mercantile Pvt. Ltd. AADCV3852H 15,000 Cheque 4.500,000 150,000 4,350,000 8,000,000 TOTAL 250,000 75,000,000 2,600,000 72.500,000 257,011,610 Sr. No. Name of the Applicant Address of the Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itworthiness assessee filed details showing financial strength of the investor companies which are reproduced as under: Sr. No. Name of the Investor Company * Share Capital Rs. * Reserves And Surplus Rs * Total Net Worth Rs. * Total Value of Shares Applied in the Assessee Company Do Share application money paid % of Total Net worth 1 Javda India Impex Ltd. 45,000,000 (28,336,978) 16,663,022 3,000,000 18.00% 2 Vanguard Jewels Ltd. 40.000.000 (17.200.452) 22,799,548 4,500,000 19.74% 3 Casper Enterprises Pvt. Ltd. 4,611,500 (42,786,817) (38,175,317) 4,500,000 -1 1 .79% 4 Duke Business Pvt. Ltd. 4,592,000 (33,778,473) (29,186,473) 9,000,000 -30.84% 5 Sumukh Commercial Pvt. Ltd. 4,912,500 (11,270,336) (6,357,836) 4,500,000 -70.78% 6 Anchal Properties Pvt. Ltd. 4,872,500 6,761,102 11,633,602 9,000,000 77.36% 7 Yash V Jewels Limited 42,517,500 46,037,091 88,554,591 4,500,000 5,08% 8 Atharv Business Pvt. Ltd. 4,160,000 12,691,435 16,851,435 4,500,000 26.70% 9 Olive Overseas Pvt Ltd. 19,637,000 10,712,520 30,349,520 4,500,000 14.83% 10 Sanjivani Enviro Protection Ltd. 9,215,000 9,926,103 19,141,103 4,500,000 23.51% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. We have noticed from the assessment order that the AO has issued notice under section 133(6) of the Act to the above mentioned share applicants to verify the transactions. In response to the said notice, of the share applicant filed the details called for and the relevant details are as under: - "i) details of investment made by them by way of share application in the appellant company inter alia, cheque No. date of cheque, and the bank on which the said cheques have been drawn. ii) Basis on which the shares are applied at premium. iii) Copies of the bank statement of share applicants from which the account payee cheques issued to the appellant and were debited. iv) Copies of the income tax return acknowledgements of share applicants for assessment year 2007-08 establishing the fact that the share applicants are regular assessees' and that year on year, they file income tax returns. v) Copies of Audited Balance sheet and Profit & Loss Account of the share applicants to prove their creditworthiness. vi) Copies of Share Allotment Letters issued by the Appellant to the share applicants along with copies of the share certificate issued by the Appellant on allotment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opy of bank statement of the appellant of the banking account in which the account payee cheques received from share applicants were deposited and credited to its account; (iv) The details of investment made by share applicants inter alia, cheque No. and date of cheque, and the bank on which the said cheques were drawn; (v) Basis on which shares are applied at premium; (vi) The copies of the bank statement of share applicants from which the account payee cheques issued to the appellant and were debited; (vii) The copies of income tax return acknowledgements of share applicants for assessment year 2007-08 establishing the fact that share applicant files income tax returns regularly; (viii) The copies of audited balance sheet and profit and loss account of the share applicants to prove their creditworthiness; and (ix) The copies of share allotment and share certificate issued by the appellant on allotment of shares against the share applicant money to prove that the shares have been allotted and issued." These details proved that the share applicant money received is genuine and explained in the absence of any contrary material brought in by Revenue. Hence, we are of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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