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TMI Blog2023 (6) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal has taken the following grounds of appeal: "1. For that on the facts and in the circumstances of the case, the impugned appellate order confirming the order passed by the Ld. A.O. is unjustified, perverse, arbitrary and bad in law. 2. For that on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was vehemently wrong and unjustified in confirming the addition made by the Ld. A.O. amounting to Rs.1,65,00,000/- u/s. 68 of the Income Tax Act, 1961 without finding any infirmity in the submission made by the appellant in regard to nature and source of cash credit. The addition is uncalled for and should be deleted. 3. For that on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was vehemently w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re into real facts behind the raise of share capital of the assessee company and also asked to assessee to furnish the following details: "1. Address proof of your company. Please produce any utility bill like electricity bill,water bill etc. as evidence. 2. Net Worth of the company for the A.Y. 2012-13. 3. Documentary evidence of source of investment in share. 4.The bank statement of your company alongwith books of accounts for F.Y. 2011-12i.e. for A. Y. 2012-13. 5. Your photo identity and residential proof. 6. Your income tax return alongwith P/L account & Balance Sheet and bank statements for the A.Y. 2012-13. 7. Fund flow during the year. 8. A copy of memorandum and article of association. 9. Copy of annual ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e identity and creditworthiness of the share subscriber and genuineness of the transaction including the justification of high premium received by the assessee during the year. He, therefore, made the impugned addition of share capital along with share premium amounting to Rs.1,65,00,000/- holding the same as unexplained income of the assessee by passing ex parte order/best judgment assessment order u/s 144 of the Act. 6. Being aggrieved by the above order of the Assessing Officer, the assessee preferred appeal before the CIT(A). Before the ld. CIT(A), the assessee claimed that shares have been issued to M/s Gajbadan Tie Up Pvt. Ltd. However, the ld. CIT(A) inter alia noted as under: "The financials and the credentials and the business p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of MAP Steels (India) Pvt. Ltd in ITA. No: 411/AHD/2015 has discussed the ingredients of a Shell Company as follows: "Securities Act Rule 405 and Exchange Act Rule 126-2 define a Shell Company as a company, other than an asset-backed issuer, with no or nominal operations; and either: * no or nominal assets; * assets consisting of cash and cash equivalents; or * assets consisting of any amount of cash and cash equivalents and normal other assets." It is observed from the perusal of the audited accounts that the above company is showing the characteristics of a shell company." 7. The ld. CIT(A) thereafter while relying upon various case laws upheld the addition made by the Assessing Officer.Being aggrieved by the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other companies in the year underconsideration. (vi) The director of the appellant company is a renowneddoctor and not a layman as in other shell companies. (vii) The appellant company is having turnover of Rs.15,67,19,802/- as compared to other shell companieswho have negligible amount of turnover. (viii) That even the turnover of the investor company was about 12,00,000/-. (ix) That the source of the funds of the investor company was by sale proceeds of the share sold. (x) That the own funds of the share applicant company were more than 15 crores at the time of opening balance of the year under consideration. (xi) That the assessee company was not a new company, it was established in the year 2009. (xii) That the director o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany was a group company of the assessee. Though, it has been contended before us that the source of the investor company was from sale proceeds of shares, however, no such details have been filed before any of the lower authorities. Moreover, the case was selected for scrutiny of large share premium and the assessee has not justified about the same by way of either submission or furnishing requisite details. In our view, the entire issue is required to be examined afresh at the end of the Assessing Officer. We, accordingly, set aside the impugned order of the CIT(A) and restore the issue to the file of the Assessing Officer for de novo assessment. Needless to say that the Assessing Officer will give adequate opportunity to the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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