TMI Blog2021 (9) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... t of shares etc. It is the findings of Ld. CIT(A) that the investments were sourced from transfer entries and there was no immediate cash deposit in the account of the investor entities. Onus was on revenue to rebut these evidences by bringing on record cogent material to dislodge assessee s evidences. However, except for relying upon the investigation findings, no independent enquiries or verifications have been done by Ld. AO. The sole basis of addition is the third party statements given by the directors of these entities. These were merely third party statements which, on standalone basis, could not form the basis of making additions in the hands of the assessee - allegations are not supported by any corroborative evidences. Once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013, it transpired that the assessee issued shares at high premium to Kolkata Mumbai based entities without any justification. Accordingly, the case was reopened as per due process of law and notice u/s 148 was issued on 15/02/2016. 3.2 During assessment proceedings, the assessee was directed to substantiate these transactions. It transpired that the assessee received share capital and share premium money from as many as 17 entities as detailed in para-5 of the assessment order. The shares having face value of ₹ 10/- each were issued at premium of ₹ 90/- per share. The assessee furnished names, addresses and PAN of the share applicants. However, Ld. AO alleged that the financials of the assessee do not justify receipt of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal before us. Our findings and Adjudication 5. So far as the legal position is concerned, we find that as per the provisions of Section 68 of the Income Tax Act, 1961, where any sum is found credited in the assessee s books and assessee offers no explanation about the nature and source thereof or the explanation furnished is found to be unsatisfactory, the sum so credited may be charged to Income-Tax as the income of the assessee of that previous year. A proviso has been inserted to the said section by Finance Act, 2012 w.e.f. 01/04/2013 to provide that where the assessee is a company and the sum so credited consists of share application money, share capital, share premium etc., the explanation furnished by the assessee shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 68 of IT Act, 1961? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgment. 3. Subject to the above, Special Leave Petition is dismissed. The ratio of said decision has subsequently been followed by various judicial authorities in catena of judicial pronouncements. The said decision has been followed by Hon ble Bombay High Court in the case of CIT Vs. Gagandeep Infrastructure Private Limited [80 Taxmann.com 272] subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith corroborative evidences. Until unless this exercise is undertaken, the additions would not be sustainable in the eyes of law. 8. Applying the aforesaid principals to the facts of the case, it could be seen that the assessee has duly discharged the primary onus of establishing the identity of the investor entities, proving their respective creditworthiness and to establish the genuineness of the transactions. The same stem from the fact that the assessee had furnished name, addresses, PAN, relevant bank statements, financial statements, Income Tax return copies of the share applicants, their respective confirmations, copy of Form No.2 filed with ROC towards allotment of shares etc. It is the findings of Ld. CIT(A) that the investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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