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TMI Blog2019 (4) TMI 2090X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence under Rule 46A. 4. (a)The order of the CIT(A) is erroneous and not tenable in law and on facts. (b)The appellant craves leave to add, alter or amend any/all the grounds of appeal before or during the course of the hearing of the appeal. 2. Briefly stated facts of the case are that consequent to search and seizure operation under section 132 of the Income-tax Act, 1961 (in short 'the Act') carried out at the premises of the assessee company on 30/06/2009, notice under section 153A of the Act was issued on 13/04/2010. In response the assessee submitted that return of income filed originally as per the provisions of section 139 of the Act for the year under consideration, might be treated as return filed in response to notice under section 153A of the Act. Subsequently, statutory notices were issued and assessment proceedings were commenced. The Assessing Officer observed receipt of share application money of Rs.2,65,00,000/- from nine (9) private limited companies other than the promoter's/ directors of the company. In the assessment completed under section 143(3) read with section 153A of the Act, the Assessing Officer held the said share application money of Rs.2,65,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies. The share applicant companies invested/paid Rs.100 per share which included share premium of Rs.90 for each share. The list of share applicant companies along with their address and the amount invested is reproduced as under: SI. No. Name of the applicants Address Amount 1. Chintapumi Builders Pvt. Ltd. 103,Ph complex, 65A, Vijay Block, Laxmi Nagar, Delhi-92 40,00,000 2. Dhanvridhi Financial Services Ltd 301, Himalaya Palace, 65 A, Vijay Block, Nr. Child Junction L Nagar, Delhi-92 25,00,000 3. Indo Dynamic Freight Pvt. Ltd. 301, Himalaya Palace, 65 A, Vijay Block, Nr. Child Junction L Nagar, Delhi-92 25,00,000 4. Kela Devi Bulders Pvt Ltd. 103,Ph complex, 65A, Vijay Block, Laxmi Nagar, Delhi-92 40,00,000 5. Kay Buildwell Pvt. Ltd. 102,Ph complex, 65A, Vijay Block, Laxmi Nagar, Delhi-92 50,00,000 6. Sevbro Domestic Appliance Pt. Ltd. 59, Emco complex, Vijay Block, L Nagar, Delhi-92 40,00,000 7. IndLon Hosiery Pvt Ltd B-l 14, Shakarpur, Delhi 15,00,000 8. Multitech Semiconductor Pvt. Ltd. S No- 1, B-l 14, Nr. Balaji Dharamshala Shakarpur, Delhi 15,00,000 9. Oracle Cables Pvt. Ltd. 301, Himalaya Palace, 65 A, Vijay Block, Nr. Child Jun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to confirm about the existence of these companies at the address from where these confirmations were received. M/s. Dhanvridhi Finance Services Ltd. M/s. Indo Dynamic Fright (P) Ltd. & M/s. Oracle tables (P) Ltd. companies as per records put forth by the assessee in his submissions and from the confirmations received by post exist at 301, Himalaya Place, 65 Vijay Block, Near Archies Gallery Laxmi Nagar, Delhi- 92,whereas the company M/s. Multitech Semiconductor (P) Ltd. & M/s. Londlon Hosiery (P) Ltd. is situated at B-114. Post office Gali. Shakarpur. Delhi-92. The inspector in his report placed on record has submitted that no such company exists at 301, Himalaya Place, 65 Vijay BlocTeTNear Archies Gallery Laxmi Nagar, Delhi-92 as the premises are occupied by M/s. M S Jain & Associates who are dealing in finance & housing loans and on making further enquiry he was apprised that M/s. Jain & Associates were in no way connected with the above companies and The persons there had heard the name of these companies for the first time. As regard M/s. Multitech Semiconductor (P) Ltd. & M/s. Indlon Hosiery IP) Ltd. the inspector in his report has submitted that at the address as given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les in relation to verification of share capital/premium under section 68 of the Act: 11. The principles which emerge where sums of money are credited as Share Capital/Premium are: i. The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and credit-worthiness of the investors who should have the financial capacity to make the investment in question, to the satisfaction of the AO, so as to discharge the primary onus. ii. The Assessing Officer is duty bound to investigate the creditworthiness of the creditor/ subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders. iii. If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack creditworthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated by Section 68 of the Act." 11. Further, in paras 12, 13 and 14 of the decision, the Hon'ble Supreme Court has observed specific facts in relation to the case as under: "12. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etailed findings of the AO from the field enquiry and investigations carried out by his office. The authorities below have erroneously held that merely because the Respondent Company - Assessee had filed all the primary evidence, the onus on the Assessee stood discharged. The lower appellate authorities failed to appreciate that the investor companies which had filed income tax returns with a meagre or nil income had to explain how they had invested such huge sums of money in the Assessee Company - Respondent. Clearly the onus to establish the credit worthiness of the investor companies was not discharged. The entire transaction seemed bogus, and lacked credibility. The Court/Authorities below did not even advert to the field enquiry conducted by the AO which revealed that in several cases the investor companies were found to be non-existent, and the onus to establish the identity of the investor companies, was not discharged by the assessee. 14. The practice of conversion of un-accounted money through the cloak of Share Capital/Premium must be subjected to careful scrutiny. This would be particularly so in the case of private placement of shares, where a higher onus is requi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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