TMI Blog2022 (12) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... nd clear that the source of share capital and share premium has been successfully explained to the best possible extent by the assessee furnishing all evidences and none of them were found to be incorrect and no defect has been pointed out. We fail to find any justification in the finding of ld. CIT(A) confirming the action of the AO making addition u/s 68 - Decided in favour of assessee. - I.T.A. No.: 2098/Kol/2018 - - - Dated:- 20-12-2022 - Dr. Manish Borad, Accountant Member And Sonjoy Sarma, Judicial Member For the Assessee : Sh. Siddharth Agarwal, Adv. For the Revenue : Smt. Ranu Biswas, Addl. CIT 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 Commissioner of Income Tax (Appeals)-23, Kolkata [in short ld. CIT(A) ] dated 30.07.2018 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 the Tribunal raising the following grounds of appeal: 1. That the order passed by the Ld. CIT(A)-23/KO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the alleged sum received in the form of share capital and share premium and accordingly made an addition u/s 68 of the Act at Rs.1,06,00,000/- thereby assessing the income at Rs.1,05,99,860/-. 4. Aggrieved, the assessee preferred appeal before the ld. CIT(A). The assessee filed various other details and evidences to explain the alleged sum. Remand report was called for by the ld. CIT(A) and the same was received vide letter dated 28.03.2017. Considering the remand report and thereafter referring to various decisions including that of Rajmandir Estate Pvt. Ltd. v. PCIT in GA No.509 of 2016 as well as decision of this Tribunal in the case of ITO vs. M/s Blessings Commercial Pvt. Ltd. in ITA No.271/Kol/2014 confirmed the addition observing as follows: The Hon ble ITAT has discussed the issue in detail in the case of ITO, Ward-5(3), Kolkata vs. M/s Blessings Commercial Pvt. Ltd. in ITA No.271/Kol/2014 for A.Y 2010-11. In this case Rs.10/- share has been issued at a premium of Rs.990/- for which there is no valid explanation given. On this question, the assessee has not even attempted to justify the amount of share premium. A perusal of the audited statement of accounts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor companies are shell companies which provides bogus share capital and share premium and the alleged sum are in the nature of accommodation entries and the investing companies do not have sufficient creditworthiness to invest such huge amount that too at a premium of Rs.990/- on the equity share of face value of Rs.10/-. 7. We have heard rival contentions and perused the records placed before us. Through these appeals, the assessee has challenged the findings of the CIT(A) confirming an addition of Rs.1,05,00,000/- made u/s 68 of the Act for unexplained share capital and share premium. On going through the assessment order, we find that the ld. AO made the addition for Rs.1,06,00,000/- which included share capital of Rs.2,05,000/- and share premium of Rs.1,03,95,000/-, but on perusal of the details, we find that figure of share capital is Rs.1,05,000/- and not Rs.2,05,000/- and therefore, correct figure of disallowance is Rs.1,05,00,000/-. We notice that during the year, the assessee received share capital and share premium totalling to Rs.1,05,00,000/- from following four investor companies: Sl. Name of the share applicants No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ha Sales Pvt. Ltd. 9. Now, moving on for examination of the facts as to whether the assessee has successfully discharged its primary onus casted upon it of proving the identity and creditworthiness of the investor/subscriber companies as well as genuineness of the transactions, we find that following documents/details have been filed by the assessee: A) Viewmore Enclave Pvt. Ltd. i) ITR Acknowledgement and Final Accounts ii) Bank statement iii) Reply filed on 09.03.2015 iv) Statement showing the source of fund v) Share application form vi) Allotment advice vii) Explanation regarding the investment in equity shares at premium viii) Board Resolution B) Trilokpati Commodities Pvt. Ltd. i) ITR Acknowledgement and Final Accounts ii) Bank statement iii) Reply filed on 27.02.2015 iv) Statement showing the source of fund v) Share application form vi) Explanation regarding the investment in equity shares at premium vii) Board Resolution C) Footflash Vanijya Pvt. Ltd. i) ITR Acknowledgement and Final Accounts ii) Bank statement iii) Reply filed on 24.02.2015 iv) Statement showing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation given in paper book and found issue of equity share by assessee company recorded in their books of account, books of accounts were maintained and audited. Similarly, all investor companies found PAN holders and filed return for AY. 2012-13 online. They file return regularly. On verification of statements of bank accounts maintained by investor companies deposit of cash not found. As per the ITR and audited balance sheet total authorized equity shares before allotment was 225000 number and rate fixed at Rs. 1/- each. Number of shares issued during FY 2011-12 was 105000 Total Premium received against issue of 105000 number of shares was Rs. 10395000/-. Figures verified with information contained in paper book and no difference could be noticed. Directors of assessee company and investors companies were examined and they confirm the investment made in M/s. Devghar Suppliers Private Limited during FY 201l-12. On query, director said that company is duly registered with ROC, equity shares were authorized by ROC, company regularly filed report to ROC, separate bank account maintained, books of accounts maintained and audited by registered CA, it has separate rente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced for removal of doubts or that it is declaratory . Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. ii) PCIT vs. Chain House International (P) Ltd. 98 taxmann.com 47 wherein Madhya Pradesh High Court held that The question raised by the revenue in regard to issuing the share at a premium is purely a question of fact. It is a prerogative of the Board of Directors of a company to decide the premium amount and it is the wisdom of shareholder whether they want to subscribe to shares at such a premium or not and mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndex number was in the file of the Revenue. The Revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee had discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises. 13. Therefore, respectfully following the judicial precedents and in the light of the facts and circumstances of the case, we are of the considered view that no addition was called for the alleged sum of the share capital and premium of Rs.1,05,00,000/- received by the assessee during the A.Y 2012-13. Thus the findings of the ld. CIT(A) is reversed and grounds of the appeal rai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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