TMI Blog2021 (6) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... pany referred at Sr. No. 1,2,4,5 and 8 of the chart where the Honble Tribunal has considered the financial aspects and observed that these companies can make investments and the investments percentage range from .47% to 5.45%. All the five investor companies contributed the share capital and premium were subject matter of adjudication by the Hon ble Tribunal and was treated as genuine in the above cases. We find that these five investor companies are part of the decisions of the Hon ble Tribunal for the same assessment year. We Considering the overall facts, circumstances, submissions and Hon ble Tribunal decisions, are of the substantive opinion that the assessee could able to substantiate its case and satisfy three ingredients being identity, creditworthiness and genuineness of the transactions. The Hon ble Tribunal has dealt elaborately on the net worth of these companies and percentage of the investments are comparatively lower than total net worth of the investor companies. Accordingly, we respectfully follow the judicial precedence and set aside the order of the CIT(A) and direct the assessing officer to delete the addition and allow this ground of appeal in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income electronically on 14.09.2010 with a total income of ₹ 2,53,121/- on 14.09.2010, and the return of income was processed u/s 143(1) of the Act. Subsequently, the A.O found certain information was not disclosed by the assessee and therefore the income has escaped the assessment. The A.O. after recording the reasons for reopening has issued notice u/s 148 of the Act. In response to the notice, the assessee has filed a letter dated 21.03.2017 to treat the return of income filed on 14.09.2010 as due compliance and requested for reasons recorded for reopening of assessment. The assessee has also filed a return of income on 11.09.2017 with a total income of ₹ 2,53,121/-.Subsequently, the A.O. has issued notice u/s 143(2) and 142(1) of the Act. In compliance, the Ld. AR of the assessee appeared from time to time and furnished the details and reply to the queries and also submitted the documentary evidences in respect of the information. There was a search and seizure operations conducted in the Loutus/Kamadhenu/Green valley Group cases. and During the financial year 2009-10 the assessee company has received a sum of ₹ 92,00,000/-as share capital including share pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 405000 450000 5 M/s Rexnox Trexim Pvt Ltd, Kolkata 8000 80000 720000 800000 Total 92000 920000 8280000 92,00,000 3. The A.O to verify the claim of genuineness issued notice u/s 133(6) of the Act to these 5 entities and the A.O. has dealt on the facts, details, information and affidavit of the Mr Rajesh Agarwal and observed that the assessee has not established the identity, creditworthiness and genuineness of the transactions. The A.O found that no information was received from the parties in respect of notice issued u/s 133(6) of the Act. The A.O. is of opinion that the assessee company has failed to prove the identity, creditworthiness and genuineness of the share holders/investors in spite evidences/ financial statements of the investors are filed. Finally the A.O. concluded that the assessee company has filed the details/evidences but could not satisfied the test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted with share application form, copy of bank statement, copy of share certificate, copy of Board resolution, copy of audit report and audited Balance sheet and enclosures, copy of certificate of incorporation, and Active status of company from MCA web site. The Ld. AR relied on the catena of Honble High Court and Honble Tribunal decisions. The Ld.AR emphasized that on similar and identical facts, the Hon ble Tribunal has confirmed the genuineness, identity and creditworthiness of the investors for the same assessment year. Further the Ld.AR substantiated his arguments with paper book, judicial decisions and orders of the Hon ble Tribunal and prayed for allowing the appeal .Contra, Ld.DR relied on the CIT(A) order. 6.We heard the rival submissions and perused the material on record. The sole crux of the disputed issue as envisaged by the Ld.AR is with respect to addition u/s. 68 of the Act on the amount received on the share application from five investors for allotment of shares during the financial year. We find that the assessee has submitted the substantial details before the assessing officer and appellate authority. The Ld.AR submitted that these 5 investor companies hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to the assessee. However, in support of this contention, the Ld. Representative of the assessee has placed reliance upon the following law.:- 1. CIT Vs. Loverly Exports Pvt. Ltd. (2008) 216 CTR 195 (SC) 2. PCIT Vs. Himachal Fibers Ltd. (2018) 98 taxmann.com 173 (SC) 3. PCIT Vs. Bharat Securities P. Ltd. (2020) 13 taxmann.com 32 (SC) 4. PCIT Vs. Rohtak Chain Co. P. Ltd. (2019) 110 taxmann.com 59 (SC) 5. PCIT Vs. Ami Industries Pvt. Ltd. 1231 of 2017 6. CIT Vs. Gagandeep Infrastructure Pvt. Ltd. ITA. No.1613 of 2014 (Bom) 7. CIT Vs. Orchid Industries Pvt. Ltd., I. T. Appeal No. 1433 of 2014 8. Jasamrit Constructions Pvt. Ltd. Vs. ITO, ITA. No. 1091/M/2016 ITAT Mum dated 8 Feb, 2018 9. Pr. CIT Vs. M/s. ApeakInfotech, Nagpur ITA. No. 26/2017 (Bom. HC) dated 8 June, 2017 10. Umbrella Projects Pvt. Ltd. Vs. ITO 18(1) ITA. No. 5955/Del/2014 dated 23 Feb, 2018. Taking into account all the facts and circumstances mentioned above and also relying upon the decision of the Hon ble ITAT in the sister concern case M/s. Binni Builder Pvt. Ltd. (supra) in which the issue has been decided on the basis of similar fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long with financial statements of the investor entity (vii) Copy of ITR acknowledgement of the investor entity (viii) Copy of Certificate of incorporation of investor entity (ix) Memorandum Articles of Association of investor entity (x) Company Master Data showing status as active (xi) Copy of Board Resolution The assessee s own bank statement was also placed on record which would show that all the transactions have taken through banking channels. Upon careful consideration of these documents, we find that so far as the identity of the investor entities are concerned, the same stand proved by certificate of incorporation which is held to be conclusive proof of registration of a corporate entity. The creditworthiness of the entities would stand satisfied by the financial statements of the investor entities, which are also placed on record. The genuineness of the transactions would stand proved by the fact that the transactions were duly supported by share application form, share certificates, copy of board resolution and by the fact that ultimately the shares were allotted to all these entities. The assessee has tabulated the net worth of all these entities in the following manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28,24,38,553 30,05,42,053 Total 207,00,000 5,74,50,130 1,21,63,78,635 1,27,38,28,765 The perusal of net worth chart would reveal that all the investor entities had sufficient net worth to make stated investment in the assessee company. Upon perusal of all these documentary evidences, it could safely be concluded that the assessee had successfully discharged the onus casted upon him u/s 68 and the onus was on revenue to rebut assessee s evidences. 8.3 Proceeding further, we find that the sole basis of making impugned addition is the statement of one of the directors as recorded during the course of survey proceedings u/s 133A. However, this statement has been retracted within a span of 7 days. It is settled law that statements recorded during the course of survey proceedings would not have much evidentiary value unless the same are backed by credible evidences. This position has been settled by Hon ble Supreme Court in the case of CIT V/s S.Khader Khan Sons (25 Taxmann.com 413). The CBDT instructions No. F.N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge since Ld. AO had sufficient reasons to form such a belief. Therefore, we do not find much substance in assessee s legal grounds. Ground Nos. 1 to 3 stand dismissed. 8.8 The appeal stands partly allowed in terms of our above order. This decision has subsequently been followed by another coordinate bench of the Tribunal in the case of assessee s sister concern namely M/s Moongipa Development Inf. Ltd. for AYs 2009-10 2010-11, ITA Nos.625 626/Mum/2019 common order dated 04/12/2020 on identical facts and circumstances. 7. We find that facts in this year are quite identical to the facts of earlier years. In fact, Ld. AR has demonstrated that 13 entities out of the 16 entities are common entities as dealt with by the Tribunal in the captioned appeals as is evident from the following tabulation: - No. Name of Investor Entity BBPL* 2011-12 2012-13 MDIL** 2009-10 MDIL** 2010-11 1 Anmol Commerce P Ltd Yes Yes 2 Rexno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorporation of investor entity (xi) Memorandum Articles of Association of investor entity (xi) Company Master Data showing status as active (xii) Copy of Board Resolution (xiv) Copy of RBI certificate of registration Upon perusal of these documents, it could be said that the primary onus as casted on the assessee in terms of the requirement of Section 68, was duly fulfilled and the onus was on revenue to controvert the evidences furnished by the assessee. However, we find that nothing has been brought on record by the revenue to substantiate the fact that the assessee s unaccounted money was routed in the books in the garb of share capital. It is trite law that no addition could be made merely on the basis of allegation, suspicion, conjectures or surmises. Upon perusal of assessee s written submissions as placed on record, another pertinent fact to be noted is that all the 16 investor entities has sufficient net worth (shares capital + reserves surplus) to make investment in the assessee and the percentage of investment made by them in the assessee company is merely in the range of 0.47% to 5.45% of their respective net worth. 8.We fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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