TMI Blog2023 (7) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration is Assessment Year 2012-13 and for this Assessment Year, the assessee is not required to establish source of source. Decided in favour of assessee. - ITA No. 65/DEL/2017 - - - Dated:- 31-5-2023 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER For the Assessee By : Shri Gaurav Kabra, CA For the Department By : Shri Shankar Lal Verma, Sr. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal by the Revenue is preferred against the order of the CIT(A)-2, New Delhi dated 16.09.2016 pertaining to Assessment Year 2012-13. 2. The solitary grievance of the Revenue is that the ld. CIT(A) erred in deleting the addition of Rs. 5,79,99,060/- made by the Assessing Officer u/s 68 of the Income-tax Act, 1961 [the Act, for short]. 3. Briefly stated, the facts of the case are that the assessee filed its return of income electronically on 26.09.2012 declaring loss of Rs. 18,581/-. Return was selected for scrutiny assessment and, accordingly, statutory notices were issued and served upon the assessee. Return was selected for scrutiny for the reason Large Share Premium Received . 4. While scrutinizing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 156/- should not be added to your income. (b) Please state as to how and when and on what basis the Share Premium was decided. Please give the name(s) and addresses of your companies directors who have decided the Share Premium. Also give the complete name and address of the directors of those companies who have been a party to the decision related to issuance of shares at premium. Please furnish the proof of correspondence i.e. letters, emails, advertisement etc related to this item. Please furnish copy of Board meeting minutes. (c) Furnish documentary evidence relating to the project or any asset for which profits will be gained/have been gained so far. (d) Any other details, explanation, confirmation which you may rely upon to prove your case. 7. In its reply, the assessee furnished the balance sheet, confirmation and share application form, copy of ITR and bank statement of share holder and explained that all the share applicants have shown investments in their respective balance sheet. 8. In so far as premium amount is concerned, a report obtained from the Chartered Accountant was filed justifying the premium on the basis of future projections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial onus u/s 68 of the Act and directed the Assessing Officer to delete the impugned addition. 15. Before us, the ld. DR strongly supported the findings of the Assessing Officer and read the relevant observations of the Assessing Officer while making the addition u/s 68 of the Act. The ld. DR reiterated that none of the share applicants responded to the notice issued by the Assessing Officer u/s 133(6) of the Act. 16. Per contra, the ld. counsel for the assessee reiterated what has been stated before the lower authorities. 17. We have given thoughtful consideration to the orders of the authorities below. It is not in dispute that the assessee has furnished complete details in relation to share applicant companies, their confirmations, Income tax particulars, bank statements and financial statements. The evidences include the following: i) Name and address of the investor; ii) PAN of the investor; iii) Income tax Jurisdiction of the investor; iv) Detail of amounts received and made of receipt, cheque no, date of cheque, amount of cheque; v) Confirmation by the investor company; vi) Share application form and share certificate; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y concerned cannot be expected to know every detail pertaining to the identity as well as financial worth of each of its subscribers. The Company must, however, maintain and make available to the AO for his perusal, all the information contained in the statutory share application documents. In the case of private placement the legal regime would not be the same. A delicate balance must be maintained while walking the tightrope of Section 68 and 69 of the IT Act. The burden of proof can seldom be discharged to the hilt by the assessed; if the AO harbours doubts of the legitimacy of any subscription he is empowered, nay duty-bound, to carry out thorough investigations. But if the AO fails to unearth any wrong or illegal dealings, he cannot obdurately adhere to his suspicions and treat the subscribed capital as the undisclosed income of the Company. XXX XXX 15. At this stage, we would like to refer to the judgment of the Bombay High Court in the case of CIT Vs. M/s Creative World Telefilms Ltd. (in ITA No.2182 of 2009 decided on 12.10.2009). The relevant portion of this order is reproduced below: In the case in hand, it is not disputed that the assessee had g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheques and was paid through the process of banking transaction as not by itself of any consequence. The High Court misdirected itself and erred in disturbing the concurrent findings of fact. While doing so, the legal position contained in Section 68 of the Act was explained by the Supreme Court by assessing that a bare reading of Section 68 of the Act suggests that (i) there has to be credit of amounts in the books maintained by the assessee; (ii) such credit has to be a sum of money during the previous year; and (iii) either (a) the assessee offers no explanation about the nature and source of such credits found in the books or (b) the explanation offered by the assessee, in the opinion of the AO, is not satisfactory. It is only then that the sum so credited may be charged to income tax as the income of the assessee of that previous year. The expression the assessee offers no explanation means the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. The opinion of the AO for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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