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TMI Blog2022 (10) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. The AO noticed on the basis of assesse's records that the assesse has issued share capital at a premium to 7 share subscribers/investors and accordingly issued questionnaire along with notice u/s 142(1) of the Act on 28.11.2014 calling upon the assessee to furnish various details/evidences. Thereafter the AO again vide letter dated 23.01.2015 called upon the assessee to produce new shareholder within 15 days. Thereafter the AO proceeded to decide the issue on the basis of available records and information. The AO found from the records before him that the assessee had issued share capital to the seven companies the details whereof are given in table in para 3 at page 2 of assessment order. The AO also admitted the fact that during the assessment proceedings, the some documents/evidences relating to share application money were furnished by the assesse however neither directors of the assessee nor that of the investor companies appeared to prove the genuineness of the transactions. The AO then referred to the information received from DDIT (Inv), Unit-iii(2), Kolkata which stated that the assessee has been beneficiary of accommodation entries of bogus share capital to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plete details in respect of all the share holders such as source of investments, bank statements, ITR's, audited annual accounts, copies of Form 23AC etc. and submitted that all these evidences/record were before the AO as well as the Ld. CIT(A). The Ld. A.R. submitted that all seven share applicants have responded to the notice issued u/s 133(6) of the Act to the AO the copies whereof are placed in the paper book however, the AO has not bothered to discuss or point out any defect or deficiency in the documents furnished by the share applicants. The said evidences were neither controverted by the AO during the assessment proceedings nor in the remand proceedings when the case was remanded back to the AO in the appellate proceedings. The Ld. A.R. submitted that the AO has simply added the amount of share capital and share premium on the ground that assessee has not produced the shareholders whereas as a matter of fact notice u/s 133(6) of the Act of the Act were issued to them and all of them responded by furnishing all the requisite details/evidences along with Sworn Affidavit by these investors confirming their subscription/investment in the assessee company and also the source of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the assessee. The Ld. A.R. submitted that no addition could be made on the basis of statement of entry operator without affording cross-examination to the assessee and in defense of his arguments he relied on the various decisions namely: i) Hon'ble Supreme Court in the case of Andaman Timber Industries (324) ELT 641. ii) Hon'ble Supreme Court in the case of CIT vs. Sunita Dhadda iii) Hon'ble Supreme Court in the case of Kishinchand Chellaram Paper Book page 482-492. iv) Calcutta High Court in CIT vs. Eastern Commercial Enterprises (1994) 210 ITR 103. v) Hon'ble Allahabad High Court in the case of CCE vs. Shyam Traders reported in the [2016] 333 ELT 389. The Ld. A.R further argued that the assessee has even proved even the source of source of the investments which is not required for the AY 2012-13 as if falls prior to the amendment which is prospective in nature and is applicable for AY 2013-14 as held by the Hon'ble Bombay High Court in the case of CIT vs. Gangadeep Infrastructure Pvt. Ltd. in ITA No. 1613 of 2014 dated 20.03.2017. The Ld. A.R. while controverting the conclusion drawn by the Ld. CIT(A) submitted that conclusion that assesse is a shell company is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is otherwise speaking and well reasoned order may kindly be upheld by dismissing the appeal of the assessee. 7. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised share capital from seven investors by issuing equity shares at premium the details whereof are given at page 2 in para 3 of assessment order . We note that during the course of assessment proceedings the AO called for various details/documents from the assessee in respect of investments and the investors which were duly supplied to the AO. Besides the AO issued notice u/s 133(6) to these companies calling for certain information/evidences which were duly furnished by all the investors and are available on record. We note that AO has not issued summons u/s 131 of the Act to the directors of the investor companies however made an addition on the basis that directors were not brought or produced by the assessee. We note that the assessee has furnished all the evidences during the assessment proceedings which are available at page 1 to 631 of PB-2 which comprised of ITR's, audited financial statements, bank statements, source of investments etc. We also note that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statement which was used against the assessee to make the addition. The case of the assessee finds support from the decision of Hon'ble Supreme Court in the case of Kishinchand Chellaram (supra) and Hon'ble Allahabad High Court in the case of CCE vs. Shyam Traders (supra). We note that the assessee has proved the source and source of source of all these investors even though the same is not required to be proved in the instant assessment year as the amendment is applicable prospectively as has been held by the Hon'ble Bombay High Court in the case of Gangadeep Infrastructure (supra). 9. Finally we note that both the authorities have reached and based their conclusions to make addition on the fact that the directors of the subscribing companies were not produced before the AO which in no way could not be the basis for making addition as the assessee has filed all the necessary documents before the authorities below proving the identities , creditworthiness of the investors and genuineness of the transactions. The case of the assessee is squarely covered by the decisions of Hon'ble Calcutta High Court in the case of Crystal Networks Pvt. Ltd. vs. CIT(Supra) wherein it has held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. It is also ruled in the said judgment at page 465 that if the Tribunal does not discharge the duty in the manner as above then it shall be assumed the judgment of the Tribunal suffers from manifest infirmity. Taking inspiration from the Supreme Court observation we are constrained to hold in this matter that the Tribunal has not adjudicated upon the case of the assessee in the light of the evidence as found by the Ld. CIT(A). We also found no single word has been spared to up set the fact finding of the Ld. CIT(A) that there are materials to show the cash credit was received from various persons and supply as against cash credit also made. Hence, the judgment and order of the Tribunal is not sustainable. Accordingly, the same is set aside. We restore the judgment and order of the Ld. CIT(A). The appeal is allowed." The case of is also covered by the decision of the coordinate bench by ITO Vs M/s Cygnus Developers India Pvt. Ltd. (supra) the operative part whereof is extracted below: "8. We have heard the submissions of the learned D.R, who relied on the order of AO. The learned counsel for the assessee relied on the order of Ld. CIT(A) and further drew our attention to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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