TMI Blog2023 (5) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... hare capital and share premium, which were added as income of the Assessee u/s. 68 of the Act in the impugned assessment year, were made in preceding assessment years. The investments made were converted into equity shares in the impugned assessment year. However, considering the fact that the credit entries relevant to the investment in share capital and share premium do not relate to the impugned assessment year, provisions of section 68 of the Act cannot be invoked in the year under consideration. All the appeals filed by the Revenue are dismissed. - ITA Nos. 2258, 2259, 2260 And 2261/Del/2018 - - - Dated:- 16-5-2023 - Shri Saktijit Dey, Judicial Member And Shri M. Balaganesh, Accountant Member For the Revenue : Shri V.K. Agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in case of M/s. MSD Finance India Pvt. Ltd. and some other persons, statement was recorded from Mr. Pradeep Kumar Shastri, Director in Kandhari group companies, wherein, he stated that part of share premium received by M/s. MSD Finance India Pvt. Ltd. and M/s. Indo Gulf Infrastructure Investment Pvt. Ltd. , in turn, were given to the assessee, which are nothing but its own unexplained income. Based on aforesaid statement, Assessing Officer proceeded to treat the share application money and share premium received as unexplained cash credit u/s. 68 of the Act and added back to the income of the assessee. The assessee contested aforesaid additions before ld. Commissioner (Appeals). After considering the submissions of the assessee in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted, the Assessing Officer has specifically recorded the fact that investments made by the two entities in assessee company were out of unaccounted money of the investors. However, on a specific query made by the Bench, ld. Departmental Representative fairly submitted that the Assessing Officer has not referred to any incriminating material found during the search and seizure operation in case of assessee with reference to the additions made. 5. Per contra, ld. Counsel for the Assessee strongly relying upon the observations of ld. Commissioner (Appeals) submitted that no incriminating material was found as a result of search and seizure operation conducted in case of the assessee, which could have led the Assessing Officer to make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statement recorded, the concerned person has stated that the share capital and share premium received by M/s. MSD Finance India Pvt. Ltd. and M/s. Indo Gulf Infrastructure Investment Pvt. Ltd., and in turn, invested with assessee company, were nothing but these two entities income from undisclosed sources, which are introduced in the names of other entities. He has also stated that the concerned person admitted to offer certain amount of income at the hands of M/s. MSD Finance India Pvt. Ltd. and M/s. Indo Gulf Infrastructure Investment Pvt. Ltd. Aforesaid facts recorded by the Assessing Officer clearly demonstrate that, at best, the share capital and share premium invested in assessee company were unexplained income of M/s. MSD Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual matrix, it can be reasonably inferred that since, no material was found during the search in respect of the equity share capital, it cannot lead to the conclusions drawn by the AO. No specific corroborative evidence has been brought on record by Assessing Officer to prove that the equity subscription is an accommodation entry. Besides, appellant has also discharged its onus and submitted all the documentary evidence in respect of the investment. The details submitted in this regard by the appellant have also been made part of order by Assessing officer. It is also undisputed fact that the director of the appellant companies have never made any statement regarding the share capital / share premium / share application money and no disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de in the impugned assessment year under any circumstance, as the assessee had received the amounts in dispute in the preceding assessment years and what the Assessing Officer has added in the impugned assessment year, is the opening balances. 11. Having considered rival submissions, we find that certain entities had invested sum of Rs.3,30,55,000/- in the share capital of the assessee company. Investments were made between the period 2011 to March 2014. As can be seen from the aforesaid facts on record, the investments in share capital and share premium, which were added as income of the Assessee u/s. 68 of the Act in the impugned assessment year, were made in preceding assessment years. The investments made were converted into equity s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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