TMI Blog2023 (7) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... - CIT(A) deleted the addition by holding that the assessee proved the genuineness of the transaction. Before us, the Ld. Sr. D.R. could not produce any contra evidences, which warrant confirming the addition made by the A.O. In the absence of the same, we have no hesitation in confirming the order of Ld. CIT(A) who deleted the additions u/s. 68. Decided against revenue. - ITA No. 329/Ahd/2015 - - - Dated:- 26-7-2023 - Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Shri Anil R. Shah, A.R. For the Revenue : Shri Rakesh Jha, Sr.D.R. ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Revenue as against the appellate order dated 28.11.2014 passed by the Commissioner of Income Tax (Appeals)-2, Vadodara arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) relating to the Assessment Year (A.Y) 2010- 11. 2. The brief facts of the case is that the assessee company is engaged in the business of manufacturing of Flanged Pipes, Fittings, Flanges and Castings. For the Assessment Year 2010-11, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 603317356 4 Compact Advertising and Credit Pvt. Ltd. 45924 170418555 5 Enkay Trafin Pvt. Ltd. 43136 14275408 2.2. Thus the Assessing Officer found the above investors are hardly showing any profit in the Return of Income. There is a complete absence of any material to suggest what wasthe justification of charging so much premium. In view of the same, the A.O. held that the assessee failed to establish identity, creditworthiness and genuineness of the transaction, therefore the share capital and Share Premium received of Rs. 1,70,00,000/- as share application money which is treated as non-genuine and disallowed the same u/s. 68 of the Act. 2.2. Similarly, the assessee received unsecured loan of Rs. 1,00,82,664/- from M/s. Jeenma Business Pvt. Ltd. The assessee could only furnish PAN and details of transaction. As the assessee failed to furnish full address, confirmation, Copy of ITR along with Audited Report and Bank details in respect of the unsecured loan received from M/s. Jeenma Busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of audited annual accounts for FY 2010-11 in which the investments made in the equity shares of the appellant were reflected in the closing entries of the equity shares and copy of bank statements of this company which reflected the payments by this company to the appellant through banking channels. But, the AO has made addition of the share application money paid by this company on the ground that this company was not found existing at the given address when the enquiry was made through DDIT Investigation 1(2), Kolkata. The appellant has submitted a new address of this company as additional evidence during the course of the appellate proceedings which has been objected to by the AO. Hence, the admissibility of such additional evidence is required to be decided first. From the facts on record, it is seen that the appellant had informed the address of the company to the AO vide its letter dated 15.10.2012 as per its records. The AO got the enquiry done through DDIT Investigation 1(2), Kolkata vide commission issued on 06.03.2013. The enquiry report dated 26.3.2013 was submitted by the DDIT Investigation. After that, the AO had informed the appellant about non existence of this compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Supreme Court of India in its decision in the case of Lovely Exports Pvt. Ltd.(supra) and by the Hon'ble Gujarat High Court in its decision in the case of Namaste Ltd.,(supra) and Shree Ram Multi Tech Ltd. 40 Taxmann.com 540 (Gujarat), this amount cannot be added as income of the appellant. Hence, the addition of this amount is also directed to be deleted. 3.1. The Ld. CIT(A) also deleted the addition made on account of unsecured loan availed by the assessee observing as follows: 4.4. The appellant had provided the PAN No. of M/s. Jeenma Business Pvt. Ltd. to the Assessing Officer, but, did not provide other documents such as confirmation from this creditors copies of accounts of this creditor etc. during the course of the assessment proceedings. From the PAN No., the details of this loan creditor were ascertainable. Now the appellant had submitted all such details during the course of the assessment proceedings. In this regard, the appellant's claim that since for getting the details sought by the AO in regard to this company, the appellant was dependent upon third party i.e. the loan creditor and hence, could not gather the documents during the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der, it is seen that very small additions has been made in this order and the return of income has been largely accepted by the AO. The AO of this creditor has also examined its books of account with all relevant documents including bills and vouchers, bank statement etc. Under such circumstances, the credit worthiness of this company cannot be doubted by the AO of the appellant. Thus, the appellant has been able to prove the identity, creditworthiness and genuineness of transactions. For this purpose, reliance is placed on the judicial pronouncement of Hon'ble Gujarat High Court in the case of Apex Therm Packaging (P) Ltd., 42 Taxmann.com 473 (Gujarat) and Dharmder Finance (P) Ltd., 43 Taxmann.com 395 (Gujarat). Reliance is also placed on the decision of the Hon'ble Gauhati High Court in the case of Jalan Timbers, 90 Taxman 298 (Gau). Hence, the addition made by the AO in this regard is directed to be deleted. 4. Aggrieved against the same, the Revenue is in appeal before us raising the following Grounds of Appeal: 1. On the facts and in the circumstances of the case the learned CIT(A) has erred in facts and in law, in deleting the addition of Rs. 1,70,00,000/-, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee company. Therefore the addition made on that account is liable to be upheld. 6. Per contra, Ld. A.R. Shri Anil R. Shah appearing for the assessee submitted before us a Paper Book consisting of submissions and case laws as follows: 2. In the assessment proceeding the AO had stated that the Share Applicants who belonged to Calcutta were not available or if available have not produce details and information required and addition were made which is very strongly objected by the Respondent since companies who had Applied for shares has satisfied all necessary conditions for making investment in Shares and of Compliances as required u/s.68 were fully satisfied and supplied. Balram Vinimay Pvt. Ltd. PAN-AACCBT057R Paper Book Page 1) Memorandum Articles of Association of Company Incorporate on 22-3-2005. 106 to 124 2) Copy of Balance Sheet P L A/c. for A.Y.2010-11 2) 125 to 141 3) Form 18-Notice of change of situation of Regd. Office Dated 18-7-2011. 142 143 4) Certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of Income for A.Y.2010-11. 209 6) Copy of order u/s.143(1) for A.Y.2010-11 by ACIT (CPC) of 15-3-2011. 210 to 216 Subhlabh Fiscal Services Pvt. Ltd. PAN-AADCS8846A 1) Certificate of Registration of RBI for doing Non- Banking Financial Institution of 23-4-2001. 217 2) Copy of Bank Statement of Indian Over Seas Bank period April 2009 to January 2010 showing purchase of Share. 218 219 3) Certificate of Establishment of Kolkatta Municipal Corporation doing Business of Investment of 29-8-2011. 220 4)Copy of Balance Sheet P L A/c. for A.Y.2010-11 221 to 243 Jeenma Business Pvt. Ltd PAN AAACJ7851K 1) Copy of Certificate of Account to True Form Techno Products Ltd. confirming deposit of Rs. 1 crore. 244 2) Copy of Bank statement in proof of Amount by cheque between 21-1-2010 to 17-3-2010 wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 68 of the Income-tax Act, 1961 - Cash credit (Bank deposits) - In course of assessment, Assessing Officer created tax liability on ground that there was failure on part of assessee to produce evidence with regard to some of investors - However, bank statements were produced before appellate authority authenticity of which was not in question or doubt and, therefore, appellate authority set aside order of Assessing Officer - Tribunal as well as High Court upheld order passed by Commissioner (Appeals) - Whether, on facts, SLP filed against High Court's order was to be dismissed - Held, yes [Para 2] [In favour of assessee] 7.4. The judgment of Hon ble Supreme Court of India in the case of Pr.CIT Vs. Rohtak Chain Co. (P.) Ltd. Vs. ACIT reported in [2019] 266 Taxmann.com 459 (SC) held as follows: Section 68 of the Income-tax Act, 1961 Cash credit (Shares) - Assessment years 2012-13 to 2013-14 High Court by impugned order held that issuing share at a premium is a commercial decision and it is prerogative of Board of Directors of a company to decide premium amount and it is wisdom of shareholder whether they want to subscribe shares at such a premium or not and, ultimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts (P.) Ltd., Adamine Construction (P.) Ltd., Godavari Tie-up (P.) Ltd. and Rohtak Chain Co. (P.) Ltd. (cited supra), we hereby confirm the deletion made by the Ld. CIT(A) on account of share application money. Thus the grounds raised by the Revenue is devoid of merits and the same is rejected. 9. Regarding the unsecured loan received from M/s. Jeenma Business Pvt. Ltd., the assessee during the appellate proceedings, produced additional documents before Ld. CIT(A). The assessee also explained the above documents relating to a third party and could not gather the documents during the course of assessment proceedings which was accepted by the Ld. CIT(A) as a plausible explanation and thereby admitted the additional documents namely incorporation of company, Return of Income for A.Y. 2010-11 and Assessment Order passed by ITO, Ward-6(2), Kolkata, Ledger account, Confirmation of account and Bank Statements. After considering the above documents, the Ld. CIT(A) deleted the addition by holding that the assessee proved the genuineness of the transaction. Before us, the Ld. Sr. D.R. could not produce any contra evidences, which warrant confirming the addition made by the A.O. In the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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