TMI Blog2024 (2) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... re non-production of director cannot be the ground for making any addition in the hands of assessee u/s 68 - Thus addition made by the Ld. AO towards share capital including share premium is directed to be deleted. Thus, grounds taken by the revenue in this regard are dismissed. - SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER For the Appellant : Shri P. P. Barman, Addl. CIT, Sr. DR For the Respondent : Shri Miraj D. Shah, Advocate ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the revenue is against the order of Ld. CIT(A)-7, Kolkata vide order no. 478/CIT(A)-7/Ward-4(1)/Kol/15-16 dated 22.09.2020 passed against the assessment order by ITO, Ward- 4(1), Kolkata u/s.143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ), dated 12.03.2015 for AY 2012-13. 2. Revenue has raised the following grounds of appeal: 1. That on the fact and circumstances of the case, the Ld. CIT(A) has erred in granting relief to the assessee on account of addition on undisclosed cash credit u/s 68 of Rs. 2,76,50,000/- though the assessee has failed to prove the genuineness of transaction and creditwor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and creditworthiness of investor companies remained unsubstantiated, as they failed to appear before the A.a. against summons issued u/s 131 ignoring the decision of Hon'ble Supreme court in the case of Pr. CIT (Central)-l, Delhi Vs. NRA Iron Steel Pvt. Ltd. (412 ITR 161). 6. That on the fact and circumstances of the case, the Ld. CIT(A) was incorrect in granting relief where the assessee failed to discharge its legal obligation to prove the receipt of share capital and share premium money to the satisfaction of the A.O. 7. That on the fact and circumstances of the case, the Ld. CIT(A) was not justified in allowing the appeal without considering the fact that the sources of share application money including share premium were not properly explained by the assessee and it lacked any real profit-making business credence. 8. That on the fact and circumstances of the case, the Ld. CIT(A) was not justified in ignoring the facts that the creditworthiness of the subscribing companies were not established before the A.O, during the course of the assessment proceedings, though the onus of providing the identity of the creditor vests solely with the assessee. 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr. DR placed reliance on the order of Ld. AO and also furnished a written submission in the arguments raised before us. On perusal of the said written statement placed on record, the arguments raised are broadly repetition of the stands taken by the Ld. AO in the impugned assessment order. 6. Ld. Counsel for the assessee submitted that to establish the identity and creditworthiness of the shareholders and genuineness of the transactions, assessee has submitted all the relevant details and documents in the course of assessment as well as appellate proceedings, details of which are tabulated in the order of Ld. CIT(A) in para 4.1 and is extracted below for ease of reference: 6.1. Ld. Counsel reiterated that the share subscribers are individual, HUF and body corporate, registered with ROC and are assessed to income tax. He further stated that these subscribers had confirmed the transactions, filed relevant papers and documents and also explained the source of funds. He thus, emphasized that assessee had discharged its primary onus casted upon it u/s. 68 of the Act. According to him, the onus thus shifted to the Ld. AO to disprove the material placed before him. Witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of the paper book and the documents placed therein, it is vivid that all the share applicants are (i) income tax assessees, (ii) they are filing their income tax returns, (iii) share application form and allotment letter is available on record, (iv) share application money was made by account payee cheques, (v) details of the bank accounts belonging to share applicants and their bank statements, (vi) in none of the transactions there are any deposit of cash before issuing cheques to the assessee, (vii) all the share applicants are having substantial creditworthiness represented by their capital and reserves. 7.2. We also take note of the elaborate and well reasoned findings and decisions arrived at by the Ld. CIT(A) by taking into consideration all the details and documents placed on record. The relevant findings and decisions are extracted as under: 4.2. I have considered the submission of the AR of the appellant in the backdrop of the assessment order. I have also considered the various judicial decisions referred to by the AO as well as the AR in support of their respective stands in the matter. I have also considered the relevant materials on record in deciding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee had discharged the burden that lay on him, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such could arise. The High Court was, therefore, right in refusing to refer the questions sought for. Decision of the High Court affirmed. In view of the foregoing discussion as well as the judicial pertinent to the issue at hand (supra), I do not find any premise to endorse the action of the AO in making the impugned addition of Rs. 2,76,50,000/- as unexplained cash credit u/s 68 of the Act. 5. Even with 'respect to charging of high premium, the matter is well covered by various judicial decisions that once the identities and creditworthiness of the share appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the year under consideration as clearly evident not only from their respective books of accounts but also from their audited accounts filed with the income tax authorities in relation to their own income tax assessments. However, the had not brought these indisputable facts on record but acted on his whims and fancies. It is observed that the burden, which lay on the appellant, in relation to section 68 of the Act, has been duly discharged by it and nothing further remains to be proved by it on the issue. Since the conditions precedent for discharging of burden of proof under the provisions of section 68 of the Act is met with adequate evidence, the addition made under such pretext deserves to be deleted. 9. While concluding, Ld. CIT(A) gave his finding by placing reliance on the decision of Hon ble jurisdictional High Court in the case of CIT Vs. Dataware Pvt. Ltd. in ITAT No. 263 of 2022 dated 21.09.2011. His concluding findings are reproduced as under: 6.5. There is no evidence adduced on record to show by the AO that the identities of the share applicants are not proved and/or that the subscription made by them to the share capital of the appellant was not ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully factual. The learned Tribunal has independently examined as to the genuinity of the transaction in the matter of raising share capital and the Tribunal noted that even during the assessment proceedings, the assessee has furnished all details ill respect of the share capital and share premium raised by the assessee besides the details of the investors by their submission dated 9.6.2014 in reply to the notice issued by the Assessing Officer under Section 142 of the Act dated 5.5.2014. The Tribunal also noted that the assessee had produced all documents, disclosed the names and addresses and PAN Numbers of the investors, copies of the share allotment advice, copies of the share application form, bank statement, statement giving details of share application, money receipt during the year, copy of Form No.2 evidencing return of allotment and copy of Form No.5 for increase in various capital. Further the assessing officer has issued notice to the investors under Section 133(6) on 11.06.2014 for carrying out independent verification of the transaction and those investors duly responded to those notice and filed the requisite details such as the number of shares subscribed, ledger a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he materials on record, we are at one with the Tribunal below as well as the Commissioner of Income-tax (Appeals) that the approach of the Assessing Officer cannot be supported. Merely because those applicants were not placed before the Assessing Officer, such fact could not justify disbelief of the explanation offered by the assessee when details of Permanent Account Nos. payment details of shareholding and other bank transactions relating to those payments were placed before the Assessing Officer. It appears that the Tribunal below has recorded specifically that the Assessing Officer totally failed to consider those documentary evidence produced by the assessee in arriving at such conclusion. We, therefore, find no reason to interfere with the decision passed by the Commissioner of Income-tax (Appeals) and the Tribunal below and answer the questions formulated by the Division Bench in the affirmative and against the Revenue. The appeal is, thus, dismissed. iii) Decision of Hon ble Bombay High Court in the case of CIT v. Creative World Telefilms P. Ltd. (2011) 333 ITR 100 (Bom) wherein it was held as under: In the case in hand, it was not disputed that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so- called alleged creditors. In those circumstances, the assessee could not do any further. In the pre mises, if the Tribunal came to the conclusion that the assessee had discharged the burden that lay on him, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such could arise. The High Court was, therefore, right in ref using to ref er the questions sought for. Decision of the High Court affirmed. 13. We note that Ld. AO has further relied upon the decision in the case of M/s Bisakha Sales Pvt. Ltd. v CIT [2014] 52 taxmann.com 305 (Kolkata- Trib.). In this case, it was held that where assessee-company received share application money with huge and unjustified share premium from corporate entities, merely because said amount was received through ..... 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