TMI Blog2023 (1) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... mmon address, in share capital of a private limited company at huge premium of Rs 180 per share and the assessee company does not have any knowledge about the whereabouts of such a valued investor in that company. Thus, the order of the learned CIT A, is not sustainable in law in deleting the above addition. In view of this, we reverse the order of the learned and CIT A and confirm the order of the learned assessing officer. - Decided against assessee. - ITA No. 4447/MUM/2019 - - - Dated:- 30-12-2022 - SHRI PRASHANT MAHARISHI, AM AND SHRI PAVAN KUMAR GADALE, JM Assessee by : None Revenue by : Shri. Sanjeev Kashyap, CIT DR. ORDER PER PRASHANT MAHARISHI, AM: 01. This appeal is filed by the ITO-13(3) (1) Mumbai (the ld. AO) for A.Y. 2011-12 against the order of theLd. CIT(A)-21 Mumbai (the ld. CIT-A)dated 29/03/2019 wherein the appeal filed by the assessee against the assessment order passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 bythe ld. AO was partly allowed.The ld. AO is aggrieved with the deletion of the addition made u/s. 68 of the Income Tax Act of ₹10 Crores on account of unexplained share capital and premium. 02. The ld. AO h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on 30.08.2016. The necessary notices were issued and the assessee was asked to explain the above share capital of ₹10 Crores. AO further issued notices u/s. 133(6) of the Act to all shareholders but all returned un-served. Further, the assessee was directed to provide new address of the shareholders. The assessee company did not give new address, but confirmation of shareholder companies were sent by the post. Further, Show Cause Notice was issued on 16.12.2016. The assessee filed submission on 31.08.2016 along with the list of shareholders, balance- sheet and bank statement for A.Y.2011-12. The AO extensively relied upon the statement of Mr. Dilip C Mehta. He also analyzed the details furnished by the assessee. He noted that, there is a difference in address of the companies as per income tax return as well as with registrar of the companies. The income shown by these companies is meager. The common address of the above parties, where the companies did not exist. The AO asked assessee to produce all his witnesses of the whole companies. Neither the assessee nor the investors and the accommodation entry providers Shri Dilip C Mehtaappeared in response to summons issued u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udited annual report, copy of bank statement of investor companies, account opening from in compliance to the KYC record of the MCA website of Register of companies, details of common identification member, CIN, copy of bank statement of the investor companies reflecting their source of investment into the appellant company; audited annual reports of the respective investing companies justifying their existence and sufficiency of net worth; Proof of source of investment made by the investing companies. Further, if the Assessing Officer nurtures any doubt on the genuineness of the transaction as held by courts the Assessing Officer should have conducted investigation but the Assessing Officer did not do so. By submitting PAN, ITR, opening of bank a/c, financial statements, bank statements of the investors, companies reflecting their source of investment not the appellant company proved the investors identify creditworthiness and genuineness of the transaction. However, the Assessing Officer has doubted credit worthiness and the genuineness of the transaction stating that all are paper companies operated by Dilip Mehta but did not controvert or disapprove the facts. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and L.N. Industries Lts (formerly known as LN Polyester Ltd) came to the conclusion that the assessee company having receipt share application money through bank channel and furnished complete details of bank statements copy of accounts and complied with notices issued and the directors of the subscriber company also appeared with books of accounts before the appellate authority and confirmed the investment made by them with the assessee company, therefore the identity and creditworthiness of investor and genuineness of transaction of the share applicant has been proved in the light of the ratio laid down by the MP High Court Delhi High Court and the Hon ble Supreme Court and were of the opinion that the onus cast upon the assessed at provided under section 68 of the Act has been duly is charged by the assessee the identity of the share subscriber creditworthiness and genuineness of the transaction is not to be doubled. The learned ITAT considered the case of the ach company a great detail in paras 65 to 110 of the impugned order and recorded its finding. The aforesaid finding of fact recorded by the ITAT are based on the material available on record which is a finding based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department is free to proceed to reopen their individual assessments, in accordance with lave but this allotment of share application money cannot be regarded as undisclosed income under Section 58 of the Act. Considering all the facts and circumstances of the case the details filed by the investors and the assessee respectfully following the decisions in the cases of Om Procurement MBM Tubes Pvt Ltd Mehta Financials of Hon'ble ITAT Mumbai referred to herein above as the facts of these cases are similar to the facts of the appellants case and decision in the case of Gagandeep Infrastructure (P) Ltd of Hon'ble High Court Mumbai and the decision of Honble High Court of Madhya Pradesh in the case of Chain House International (P) Ltd and the decision of Hon'ble Supreme Court in the case of Lovely Exports (P) Ltd the addition made by the Assessing Officer of Rs 10 crores as unexplained share application money is unwarranted and therefore addition made by the Assessing Officer is deleted. Thus, the grounds of appeal No 1 to 6 are allowed. 07. Therefore, the LD AO is aggrieved. The ld. DR relied upon the order of the ld. AO. 08. Despite notice, none appeared on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) have been replied with by the shareholders by producing the relevant details. When the fact shows that at the addresses nobody exists, the learned CIT A, did not even care to address this argument of the learned assessing officer while giving the above finding. Thus, the finding of the learned CIT A that all the parties replied to notice u/s 133 (6) of the act is incorrect. Further, the learned CIT A has put onus on the assessing officer that if the AO has any doubt, he should have conducted the investigation and failure on the part of the AO to make such investigation, he deleted the addition. The learned CIT A, has conveniently ignored the fact that the assessee was asked to produce the shareholders, the correct address of the shareholders, the directors of the assessee company itself, none of these was complied with by the assessee, therefore, when initial onus is not discharged by the assessee, burden does not shift on the assessing officer. Thus, the learned CIT A is incorrect in putting unnecessary burden on the office of the learned AO.As the assessee has not given correct address of the shareholders, the ld. AO was prevented from making any inquiry further. Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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