TMI Blog2023 (2) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... f PCIT v. Paradise Inland Shipping Pvt. Ltd. [ 2017 (11) TMI 1554 - BOMBAY HIGH COURT] held that once the assessee has produced documentary evidence to establish the existence of the subscriber companies, the burden would shift on the revenue to establish their case. Going by the records placed by the assessee of all the share subscribing companies, it can be safely held that the assessee has discharged his initial burden and the burden shifted on the AO to enquire further into the matter which he failed to do so. It is also noted that all the investing companies have sufficient own funds available with them to make investment in the assessee. Assessee has discharged its onus to prove the identity and creditworthiness of the share subscribing companies and the genuineness of the transactions received during the impugned year - direct the ld. AO to delete the addition made towards share capital and share premium u/s. 68 - Decided in favour of assessee. - ITA No. 351/Kol/2019 - - - Dated:- 13-1-2023 - SHRI SONJOY SARMA , JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL , ACCOUNTANT MEMBER For the Appellant : Shri Anil Kochar , Advocate For the Respondent : Smt. Ranu Biswa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the audited balance sheet as on 31.03.2011 as share application money pending allotment . In the impugned assessment year i.e. AY 2012-13, assessee received fresh funds towards share capital and share premium of Rs. 121.50 lacs. In the impugned AY 2012-13, shares were allotted to eighteen different allottee companies towards share application money of Rs. 118.50 lacs received in the preceding year and Rs. 121.50 lacs received during the impugned year, totalling to an amount of Rs. 230 lacs. Ld. Counsel also pointed the fact that out of the total receipt of Rs. 118.50 lacs in the immediately preceding year, one share applicant namely, JDL Investment Consultants Pvt. Ltd. who had contributed Rs. 10 lacs, took back its investment and which was refunded by the assessee. He thus, contended that since the amount of Rs. 118.50 lacs has not been received in the accounting year relevant to AY 2012-13, Ld. AO has wrongly treated it as unexplained cash credit received during the year for the purpose of making addition u/s. 68 of the Act. According to him, the addition made in this respect is bad in law and is ought to be deleted. 5.1. In respect of the balance of Rs. 121.50 lacs rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have not been controverted by the authorities below in any manner whatsoever. As per him, since ld. AO was not impressed with these submissions and resorted to making addition of the entire share application money along with share premium totalling to Rs. 230 lacs on the sole ground that compliance u/s. 131 by the directors of the assessee and share applicant companies was not done by way of their personal appearance. 7.1. He also referred to the copies of bank accounts of the respective share applicant companies to demonstrate the genuineness of the transaction so also their audited financial statements wherein these have been duly recorded and reflected. He thus, strongly submitted that Ld. AO had not brought anything contrary to undisputable facts and has merely acted on whims and fancies. 7.2. To buttress his submissions, Ld. Counsel placed on record the decision of Hon'ble Jurisdictional High Court of Calcutta in the case of CIT v. Dataware Pvt. Ltd. in ITAT No. 263 of 2011 dated 21.09.2011 wherein Hon'ble jurisdictional High Court held that After getting the PAN number and getting the information that the creditor is assessed under the Act, the Assessing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reach the shareholders since all the relevant material details and particulars were given by the assessee to the Assessing Officer. In the above circumstances, the view taken by the Tribunal could not be faulted. No substantial question of law was involved in the appeal.'' 7.5. Decision of Hon'ble Madras High Court in the case of Pranav foundations Ltd. (2015) 229 Taxman 58 (Mad) is also referred wherein it was held as under: In view of the fact that all the four parties, who are subscribers of the shares, are limited companies and enquiries were made and received from the four companies and all the companies accepted their investment. Thus, the assessee has categorically established the nature and source of the said sum and discharged the onus that lies on it in terms of section 68. When the nature and source of the amount so invested is known, it cannot be said to undisclosed income. Therefore, the addition of such subscriptions as unexplained credit under section 68 is unwarranted. 8. It was also submitted that audited Balance Sheet of each of the share applicant companies reflected the amount of investment made by them in the assessee as against thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions to make appear a non-genuine transaction as a genuine one. 11. We have heard the rival contentions and gone through the material placed on record. Admittedly, it is a fact on record that out of the total amount of Rs. 230 lacs, Rs. 118.50 was received by the assessee in the preceding year which was duly accounted and reported in its audited balance sheet as on 31.03.2011 as Share application money pending allotment . The same is extracted below for ease of reference : 11.1. Out of this amount of Rs. 118.50 lacs received in the preceding year, Rs. 10 lacs was returned by the assessee. Shares have been issued and allotted to all the eighteen share subscribing companies on two different dates during the impugned year as per the chart extracted above. We note that ld. AO has made the addition of entire amount of Rs. 230 lacs as received during the year, ignoring the verifiable fact that out of this total of Rs. 230 lacs, an amount of Rs. 118.50 lacs was received during the preceding year. Considering the facts on record and the provisions of section 68 of the Act, no addition is called for in respect of amount received by the assessee during the preceding year which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.3. Ld. AO has not bothered to discuss or point out any defect or deficiency in the documents furnished by the assessee of the share subscribing companies. These evidences furnished have been neither controverted by the Ld. AO during the assessment proceedings nor anything substantive brought on record to justify the addition made by him. Ld. AO has simply added the amount of share capital and share premium on the ground that assessee has not produced the directors/shareholders. Thus, going by the records placed by the assessee of all the share subscribing companies, it can be safely held that the assessee has discharged his initial burden and the burden shifted on the AO to enquire further into the matter which he failed to do so. It is also noted that all the investing companies have sufficient own funds available with them to make investment in the assessee. 12. From the perusal of the paper book and the documents placed therein, it is vivid that all the share applicants are (i) income tax assessees, (ii) they are filing their income tax returns, (iii) share application form and allotment letter is available on record, (iv) share application money was made by account paye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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