TMI Blog2022 (2) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany for issuing shares at premium and allotment of shares to the investor company; (h) Copy of Offer letter given by the assessee to the investor dated 02.08.2013; (i) Copy of letter showing acceptance to the offer of shares filed by the investor dated 06.08.2013; (j) Copy of Affidavit of Mr. Bhagwanji Patel ; (k) Copy of letter given by the assessee to the investor for intimation of allotment dated 02.11.201; (l) Retraction Statement of Shri Pradeep Poddar dated 09.12.2014; (m) CBDT Letter F.No.286/98/2013-IT(Inv II) dt. 09.01.2014; and (n) Judgment of Hon'ble Gujrat High Court (Ramanbhai B Patel and Chetnabhen J Shah[ 2016 (7) TMI 1212 - GUJARAT HIGH COURT] If we follow the path taken by the coordinate benches in the cases where production of the evidences showing identity of parties and money having been routed through banking channels, in the absence of any findings to show lack of genuineness, we should unhesitatingly uphold taking the amounts outside the ambit of the unexplained credits under section 68. On the other hand, if we follow the path of putting genuineness to test on the basis of an overall larger picture and ground realities, it will be difficult to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certainly bring an end to this divergence of approach. We direct the Registry to place the matter before Hon ble President, for taking a call on our recommendation for constitution of a bench of three or more members to decide this bunch of appeals. - ITA Nos. 4057/Mum/2019, ITA Nos. 3697 & 3698/Mum/2019, ITA Nos. 4039, 4044, 4058/Mum/2019, CO No. 44/Mum/2021 Arising out of ITA No. 4044/Mum/2019, ITA No. 1482/Mum/2019, CO No. 109/Mum/2021 Arising out of ITA No. 1482/Mum/2019, ITA No. 2341/Mum/201 - - - Dated:- 25-2-2022 - ITA No. 2341/Mum/2019, CO No. 111/Mum/2021 Arising out of ITA No. 2341/Mum/2019, ITA No. 2340/Mum/2019, CO No. 112/Mum/2021 Arising out of ITA No. 2340/Mum/2019, ITA Nos. 1484, 1485 1593/Mum/2019, CO No. 43/Mum/2021 Arising out of ITA No. 1484/Mum/2019, ITA Nos. 3115 3040/Mum/2019 Pramod Kumar (Vice President), and Rahul Chaudhary (Judicial Member) Nikhil Chaudhury, Commissioner (DR), for the revenue Rushabh Mehta, CA, for the assessee SPECIAL BENCH REFERENCE Per Pramod Kumar, VP: 1. One of the issues which have come up for our adjudication in this appeal, in substance, is the Assessing Officer s grievance raising the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare subscription by the DTPL. The Assessing Officer noted that the share subscriptions were by private placements and relied upon the analysis of legal position in the light of Hon ble Delhi High Court s judgment in the case of CIT Vs Nova Promotors and Finlease Pvt Ltd [(2012) 18 taxmann.com 271 (Del)]. It was also noted that there was a full-fledged racket providing accommodation entries and the common directors in many such companies, including DVPL. It was also noted that DVPL, alongwith two other companies- namely Rowland Trexim Pvt Ltd and Bhawana Computers Pvt Ltd had invested Rs 118 crores in the group companies of the assessee, and the very group companies of the assessee, in which such huge investments were made, had eventually purchased all the three companies for an overall consideration of Rs 5 crores. The transaction thus was, taking these three companies together, that a company invests Rs 118 crores in Lotus group companies, and the companies so investing the money in Lotus group companies buy these investment companies for Rs 5 crores. The transaction was analyzed in the assessment order as follows: 6.14 One more important fact worth noticing is that the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the amounts received by the assessee as share capital lack genuineness and these amounts were added to the income of the assessee. While doing so, he also referred to, rather extensively, from the statement of PKP as recorded by the investigation wing, and about how a transaction as a part of such financial maneoverng cannot be treated as a genuine transaction. However, when matter was carried in appeal before the Commissioner (Appeals), she noticed that the assessee has furnished (a) PAN Card of investor; (b) ITR Acknowledgement along-with computation of income of the investor company; (c) Financial statements of the investor company; (d) Bank Statement of the investor company highlighting the share application money invested ; (e) Copy of duly signed Share Application forms of the investor; (f) Copy of the Return of Allotment (Forrn 2) filed with the Registrar of Companies; (g) Copy of boards' resolution of the appellant company for issuing shares at premium and allotment of shares to the investor company; (h) Copy of Offer letter given by the assessee to the investor dated 02.08.2013; (i) Copy of letter showing acceptance to the offer of shares filed by the investor dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal income, and that this instruction has been relied upon by Hon ble Gujarat High Court to hold that an addition cannot be made on the basis of admission simplictor. The impugned addition was thus deleted. The Assessing Officer is aggrieved of the relief so granted by the learned CIT(A) and is in appeal before us. 5. When this bunch of appeal came up for hearing before us, our attention was invited to a large number of decisions of the coordinate benches which hold that once all such material, such as mentioned in paragraph 3 above, are filed by the assessee, the onus shifts on the department to prove that the share capital subscription is genuine, and there is no specific findings by the Assessing Officer to disprove the transactions either. In the 16 page note filed by the learned counsel, numerous decisions of the coordinate benches and judgments from Hon ble Courts above have been filed to buttress this point. As we take note of this plea, we are also alive to the fact that certain coordinate benches have taken a different path, for example in DCIT Vs Leena Power Tech Engineers Pvt Ltd [(2021) 130 taxmann.com 341 (Mum)], authored by one of us (i.e. the Vice President) where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee company, there were similar credits in its bank accounts of the DTPL from different sources, the fact that DTPL s annual office expenses were less than Rs 20,000, the fact that the DTPL made this investment at a huge premium and there is no justification on record for such a huge premium-that too through a private placement, and the fact that DTPL aptly meets the description of shell companies which are used for financial manoeuvrings. The phenomenon of shell companies being used for financial manoeuvrings and even money laundering, as even Hon ble Prime Minister took note of in his 2017 independence day address, is not an open secret- secret if it is; we, as a specialized Tribunal, cannot even pretend to be so na ve to be oblivious of it. When we so look at this case without any blinkers on, the share capital transaction in question can be anything but genuine, and genuineness is a critical factor for deciding whether or not a transaction can be said to be unexplained credit under section 68. Clearly, therefore, there is no meeting ground in the approaches so adopted by the coordinate benches. 6. As for the coordinate bench decisions, these decisions deserve utmost respec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
