TMI Blog2022 (11) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the appellant Shri Vijay Kumar, Addl. CIT, appeared on behalf of the Respondent ORDER Per Manish Borad , Accountant Member : This appeal filed by the assessee pertaining to the Assessment Year (in short AY ) 2012-13 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the Act ) by National Faceless Appeal Centre [in short ld. CIT(A) ] dated 16.03.2022 which is arising out of the assessment order framed u/s 143(3) of the Act dated 13.03.2015. 2. The assessee is in appeal before this Tribunal raising the following grounds: (1) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of Assessing Officer who considered share capital with premium aggregating to Rs.2,77,00,000/- received from three corporate entities as unexplained cash credit u/s 68 of Income Tax Act, 1961. (2) That the Ld. CIT(A) having admitted that appellant submitted documents relating to identity, creditworthiness and genuineness of all the three shareholders is erred in confirming the action of Assessing Officer who considered share capital as unexplained cash credit u/s 68 of the Act. (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the assessee to provide satisfactory explanation about the sum found to be credited in the books of assessee and it is a clearly settled legal position as held by various decisions that if the assessee is able to prove the identity of the share holders, genuineness of the transaction and creditworthiness of the shareholder then addition u/s 68 cannot be made. He further submitted that to prove the three ingredients, the assessee has filed documents for all the alleged three shareholders namely Everfast Infrastructure Pvt. Ltd. (EIPL), Fantastic Highrise Pvt. Ltd. (FHPL) Silverson Logistics Pvt. Ltd. (SLPL) in the form of Income-Tax Return, audited balance sheet, profit and loss a/c and bank statement. He further submitted that documents were placed before the ld. Assessing Officer but the Assessing Officer failed to appreciate that all the alleged cash creditors were having sufficient share capital, reserve and surplus making the alleged investment in the share capital of the assessee company. The ld. counsel for the assessee also submitted that one of the reasons for the alleged addition by the Assessing Officer was non-appearance of the director of the assessee company and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Per contra, the Departmental Representative vehemently argued supporting the detailed findings of both the lower authorities and stated that the alleged three share applicants are paper/shell companies and the assessee failed to explain the alleged sum and thus, the addition has rightly been made u/s 68 of the Act. 7. We have heard rival contentions and persued the records placed before us. In the Ground No.1 2 raised by the assessee, it is stated that the ld. CIT(A) erred in confirming the action of the Assessing Officer considering the share capital and share premium aggregating to Rs.2,77,00,000/- received from three corporate entities as unexplained cash credit u/s 68 of the Act. During the year under consideration, the assessee company issued 27600 shares of Rs.10/- each at a share premium of Rs.990/- each which was subscribed and allotted to the following three entities: Sl. Name No. of shares Total receipt including premium 1 Everfast Infrastructure Pvt. Ltd. 10000 1,00,00,000/- 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re regularly investing into the equity of other companies also as evident from their balance sheets and in the normal course of business, they have invested in the assessee company too. 10. Further, we notice that all these details were very much placed before the Assessing Officer but while framing the assessment, no efforts have been made by the Assessing Officer to examine the correctness of various proof filed by the assessee by carrying out any investigation and merely for non-appearance of the directors, the ld. Assessing Officer disregarded all these documents which have been placed before various statutory authorities including Registrar Of Companies, Income Tax Department and Schedule Banks. The assessee by way of filing all these documents necessary to prove identity, creditworthiness and genuineness of the alleged transaction, has discharged the initial burden casted upon it under the provisions of section 68 of the Act unless and until, the assessing authority finds any lacuna or adversity or defect in the said documents, the burden to prove remains on the Revenue authorities which is in the instant case, the ld. Assessing Officer failed to discharge and summarily di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusion arrived by the Assessing Authority is to be communicated to the assessee if such explanation is not considered satisfactory. If thereupon the assessee submits any comments or furnishes further information, in that event, the Assessing Authority has to examine the same and arrive at his own conclusion. The inbuilt safeguard provided in section 68 cannot be ignored by the Assessing Authority at his sweet will. The Assessing Authority can add the share capital as undisclosed income if no explanation is offered by the assessee. But since the details/explanations were offered, it was incumbent on the Assessing Authority to examine the same and arrive at a cogent conclusion. Assessing Officer having failed to discharge such obligation the addition is not sustainable in law.., case of CIT vs. Lovely Exports Ltd. (2008) 216 CTR 195 (SC) that where share application money. Hon ble Bombay High Court in the case of CIT vs. Creative World Telefilms Ltd. (supra) wherein it was held as follows: In the case in hand, it is not disputed that the assessee had given the details of name and address of the shareholder, their PA/GIR number and had also given the cheque number, name ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
