TMI Blog2021 (5) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... y, assessment of the assessee was duly reopened. In the instant case, the reopening has been made within four years from the end of the relevant assessment year. We hold that tangible information was very much available with the ld. AO to trigger the process of reopening and hence, the reopening is held to be valid and accordingly, the ground No.1 raised by the assessee challenging the validity of reopening of assessment is dismissed. Unexplained cash credit u/s.68 - Capital share gain with share premium - All the transactions are routed through account payee cheques in the regular banking channels. The justification for premium was also duly made by the assessee by giving explanation in writing. This clearly proves the genuineness of the transactions. We find that the ld. AO after receiving all the information in the form of various documentary evidence remained silent. AO did not resort to make any verification in any manner whatsoever either by issuing notice u/s.133(6) of the Act or issuing summons u/s.131 of the Act to the concerned shareholders in order to exmine the veracity of such documents. We find that the ld. AO without resorting to any sort of verification in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 24/10/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle-2(3), Mumbai (hereinafter referred to as ld. AO). ITA No.2864/Mum/2019 ( A.Y.2011-12) This appeal in ITA No.2864/Mum/2019 for A.Y.2011-12 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-48, Mumbai in appeal No. CIT(A)-48/IT-76/DCCC-2(3)/2017-18 dated 28/02/2019 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 23/10/2017 by the ld. Dy. Commissioner of Income Tax, Central Circle-2(3), Mumbai (hereinafter referred to as ld. AO). As identical issues are involved in all these appeals, they are taken up together and disposed of by this common order for the sake of convenience. ITA No.2865/Mum/2019 (A.Y.2010-11) 2. The assessee has raised the following grounds of appeal:- 1. The Hon ble CIT(A) has erred in confirming the order of learned assessing officer in respect of the re-opening of the assessment while issuing notice u/s.148 of the Income Tax Act, 1961 inspite of the fact that orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion from the DGIT (Inv) Mumbai in the case of the assessee that the assessee was in receipt of funds in the form of share capital and share premium of ₹ 2,60,00,000/- from M/s Avance Technologies Ltd., and M/s Prabhav Industries Ltd. Further, the statement of Devang Dinesh Chandra Master, Director of M/s. Empower India Ltd., has confirmed that M/s Avance Technologies Ltd., and M/s Prabhav Industries Ltd. are controlled and managed by Shirish Chandrakant Shah. Therefore, based on the information received from the DGIT (Inv.) Mumbai, the ld AO has made the addition of ₹ 2,60,00,000/-. 3.2. The ld. AO observed that assessee had received share capital and share premium from the following parties during the year under consideration as under:- Sl.No. Date of transaction Name No.of shares allocated Issue Price (Rs.) Total Value Total Securities Premium 1. 23.02.2010 Avance Technologies Ltd., 12,500 10/- per share 1,25,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment of the assessee was duly reopened. In the instant case, the reopening has been made within four years from the end of the relevant assessment year. We hold that tangible information was very much available with the ld. AO to trigger the process of reopening and hence, the reopening is held to be valid and accordingly, the ground No.1 raised by the assessee challenging the validity of reopening of assessment is dismissed. 4. It is not in dispute that assessee had indeed received share capital with share premium from M/s. Avance Technologies Ltd., and M/s. Prabhav Industries Ltd., during the year under consideration. The details of the receipts are already tabulated hereinabove. We find that assessee had submitted the following documents before the ld. AO:- a) Details of share capital and share premium received; b) Name and address of the shareholders from whom share capital and share premiums were received ; c) Bank statements of shareholders for the relevant period; d) Copy of ITR acknowledgement of shareholders; e) Computation of total income of shareholders for the relevant years; f) Relevant abstract of balance sheet and profit and loss a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to receipt of share capital and share premium as listed hereinabove, it also furnished the workings for share valuation during the A.Y.2010-11 and furnished explanation for issuing shares at a premium taking into account the future growth in the business of the assessee and also considering the future prospects of the assessee business. It was submitted that assessee is in the business since 2007 and commands significant Goodwill, excellent past performance and high investors confidence resulting into bright future prospects for the assessee in the long run. It was submitted that these aspects were duly appreciated by the shareholders and accordingly the shareholders had agreed to invest in the assessee company at a premium. 4.5. We find that assessee by furnishing all the aforesaid documents had duly explained the nature and source of credit in the form of share capital and share premium received from the aforesaid two shareholders. From the balance sheet of the shareholders, it could be seen that they are having sufficient creditworthiness to make investment in the assessee company. Similarly all the shareholders are duly assessed to tax and had filed their income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61. The assessment u/s.143 (3) r.w.s. 147 of the Income Tax Act, 1961 was completed merely on the basis of change of opinion. In view of the above, the said order passed should be squashed and necessary direction should be given in this regard. 2. Without prejudice to above, on the facts and circumstances of the case and in law, the Hon ble CIT(A) has erred in confirming the addition of ₹ 3,01,00,000/- u/s.68 of the Income Tax Act, 1961. The Hon ble CIT(A) has erred in considering the share capital issued by the Appellant as unexplained cash credit for the year under consideration. It is submitted that appellant has submitted relevant documents to prove the identity, genuineness of transactions and creditworthiness of the party. It is therefore prayed that addition made on account of unexplained cash credit shall be deleted and necessary direction shall be given in this regard. 3. Without prejudice to above, on the facts and circumstances of the case and in law, the Hon ble CIT(A) has erred in confirming the addition of ₹ 4,51,500/- (1.5% of ₹ 3,01,00,000/-) being unaccounted commission expenditure on the above share capital issued by the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances that no addition could be made u/s.68 of the Act without testing the documents filed by the assessee in the manner known to law. 7.4. Even otherwise, we find that all these parties from whom share capital and share premiums were received by different assessee s were subject matter of adjudication by this Tribunal and were accepted as genuine in the following cases:- a) ITO-6(1)(2) vs. Amirashmi Finstock Pvt. Ltd., in ITA No.4558-4559/Mum/2017 dated 22/10/2020. b) Taper Trading LLP vs. PCIT in ITA No.1470/Mum/2018 for A.Y.2013-14 dated 31/12/2018 7.5. We find that for both the assessment years 2010-11 and 2012-13 in support of receipt of share capital and share premium, the assessee had furnished all the relevant documentary evidences thereby discharging primary onus cast on the assessee in terms of Section 68 of the Act. We hold that the onus thus, thereafter shifts to the revenue to rebut the assessee s stand as well as documentary evidences by bringing on record cogent material to dislodge the same. This was admittedly not done by the ld. AO for both the years. We find that the addition was solely made based on a third party statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary direction shall be given in this regard. 3. Without prejudice to above, on the facts and circumstances of the case and in law, the Hon ble CIT(A) has erred in confirming the addition of ₹ 7,50,000/- (1.5% of ₹ 5,00,00,000/-) being unaccounted commission expenditure on the above share capital issued by the Appellant for the year under consideration. It is therefore prayed that above addition shall be deleted and necessary direction shall be given in this regard. 4. Your appellant craves to add, alter, or amend any of the grounds of appeal on or before the date of hearing of appeal. 10. We have heard rival submissions and perused the materials available on record. We find that assessee has received share capital and share premium from the following parties:- Name of the Party No. of Shares Amount paid up Share premium Total Amount received Yantra Natural Resources (Earlier known as Shri Ganesh Spinners Ltd) 12500 5,00,000/- 2,45,00,000/- 2,50,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be given in this regard. 3. Without prejudice to above, on the facts and circumstances of the case and in law, the Hon ble CIT(A) has erred in confirming the addition of ₹ 1,95,000/- (1.5% of ₹ 1,30,00,000/-) being unaccounted commission expenditure on the above share capital issued by the Appellant for the year under consideration. It is therefore prayed that above addition shall be deleted and necessary direction shall be given in this regard. 4. Your appellant craves to add, alter, or amend any of the grounds of appeal on or before the date of hearing of appeal 12.1. We find that assessee was in receipt of share capital and share premium from Empower Industries India Ltd., to the extent of ₹ 1,30,00,000/-. In the opinion of the ld AO, this entity is managed and controlled by Shri Shirish Chandrakant Shah. The facts prevailing in this assessment year are identical with those facts prevailing in the case of Seth Carbon And Alloys Pvt. Ltd., for A.Y.2010-11 and addition has been made herein for the very same reasons stated by the ld. AO in the case of Seth Carbon And Alloys Pvt. Ltd., The ld. AO while framing the assessment in the case of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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