TMI Blog2023 (10) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... subscribers to insist for their personal presence. AO, in our view, could have taken an adverse inference, only if, he would have pointed out the discrepancies or insufficiency in the evidences and details received in his office and pointed out as to on what account further investigation was needed by way of recording of statement of the directors of the subscriber companies. Even if the directors of the subscriber companies have not come personally in response to the summons issued by the AO, in our view, adverse inference cannot be taken against the assessee solely on this ground as it is not under control of the assessee to compel the personal presence of the directors of the shareholders before the AO. AO in this case has not made any independent enquiry to verify the genuineness of the transactions. The assessee having furnished all the details and documents before the AO and AO has not pointed out any discrepancy or insufficiency in the said evidences and details furnished by the assessee before him. As observed above, the assessee having discharged initial burden upon him to furnish the evidences to prove the identity and creditworthiness of the share subscribers an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed cash credit merely for the reason of non-compliance to summon u/s. 131 of the IT Act, 1961. 6. For that the Ld CIT(A) erred in confirming the order of the AO simply relying on the judgment of Calcutta High Court in Rajmandir Estates Pvt. Ltd. which was rendered in connection with the proceedings u/s 263 by which the assessment order was simply set aside for fresh assessment and was not an authority for the purpose of addition u/s 68. 7. For that on the facts and in the circumstances of the case the Ld. CIT(A) erred in confirms the order of the AO without examining the assessment records since the evidences with regard to the receipt of share capital including confirmation from the shareholders, their accounts, PAN and Bank statements were on record and the Ld. AO failed to bring any evidence disproving such evidences as per directions of the Ld. CIT passed u/s 263. 8. For that the under the facts and circumstances of the case the Ld. CIT(A) erred in considering the share application money of14,78,00,000/- as unexplained cash credit whereas all the information were duly on records 9. For that on the facts and in the circumstances of the case the order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urden of proof to substantiate the identity and creditworthiness of the share subscribers and genuineness of the transaction. The learned AO, therefore, passed fresh assessment order u/s 143(3)/263/147/143(3) and made the impugned additions treating the share capital received by the assessee as unexplained income of the assessee. The ld. CIT(A) confirmed the additions so made by the Assessing Officer. 5. We have heard the rival contentions and gone through the record. The Ld. Counsel for the assessee has contended that in this case, the assessee had filed all evidences to prove the identity and creditworthiness of the subscribers and genuineness of the transaction including the address, PAN Form 2 Form 5 filed with Registrar of Companies of the share subscriber companies, their audited financial statements, acknowledgement of filing their Income Tax Return, copy of bank statement of the allottee company highlighting the payment of the entire amount of share capital . That all the transactions were done through banking channel and duly confirmed by the share subscribers. That even the notices u/s 133(6) of the Act were issued by the AO which were duly complied with by the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Investment (d) Bank Statements (e) Source of Fund (f) Master Data (g) Directors details. We would like to state that since the assessment pertains to the Assessment Year 2009-10 after which almost 5 year, have elapsed. Therefore, it is quite possible that many of the parties with whom we had transactions may have moved to other places or may not be bothering to comply with notices, if any, issued to them. Since the assessment is getting time barred on 31.03.2014, kindly intimate us about the notices which could not be served /served but not complied with. Kindly afford us sufficient opportunity to enable us to ensure necessary compliances as a matter of principles of natural justice. Thanking you, Yours faithfully For Atlantic Dealers Pvt. Ltd. Rajesh Kumar Agarwal, FCA, A/R Enclosed: As stated The Ld. Counsel for the assessee has submitted that the assessee, otherwise, had provided all the details to the assessing officer to prove the identity and creditworthiness of the subscribers and genuineness of the transaction, as noted above. He has further submitted that the subscribing companies were having adequate reserves and surpluses to invest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has duly acknowledged the receipt of the relevant documents/evidences not only from the assessee, but also from the subscriber companies. However, he insisted for personal appearance of the directors of the subscriber companies without even going through and discussing about the discrepancies, if any, in the documents furnished by the assessee as well as by the share subscriber companies to prove the identity and creditworthiness of the subscribers and the genuineness of the transaction. The AO has not pointed out in the Assessment Order as to what further enquiries he wanted to make from the directors of the subscribers to insist for their personal presence. The Assessee in this case, as noted above, explained about the identity, creditworthiness and financials etc. of each of the share subscriber company individually. However, we note that in the assessment order that the AO has not even mentioned the names of the share subscriber companies and even has not mentioned a word as to which of the share subscriber company or the corresponding transaction thereof was not genuine and on what grounds. The AO, in our view, could have taken an adverse inference, only if, he would have poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the the land mark case of Kale Khan Mohammed Hanif v. CIT [1963] 50 ITR 1 (SC) and Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC) laid down that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness, then the AO must conduct an inquiry, and call for more details before invoking Section 68. If the Assessee is not able to provide a satisfactory explanation of the nature and source, of the investments made, it is open to the Revenue to hold that it is the income of the assessee, and there would be no further burden on the revenue to show that the income is from any particular source. Thereafter the hon ble Supreme court summed up the principles which emerged after deliberating upon various case laws as under : 11. The principles which emerge where sums of money are credited as Share Capital/Premium are : i. The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and credit- worthiness of the investors who should have the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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