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TMI Blog2024 (6) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... s not vested with territorial jurisdiction on the date of issue of notice on 07.08.2013. The said ground is not pressed at the time of hearing and is accordingly dismissed as not pressed. 3. The common issue in other grounds of appeal i.e. 2,3 & 4 is against the order of Ld. CIT(A) upholding the order of AO thereby confirming the addition of Rs. 1,66,16,400/- as made by the AO u/s 68 of the Act in respect of unexplained share capital/share premium. 4. Facts in brief are that the assessee filed return of income on 13.09.2012 declaring total loss of Rs. 1,16,400/-. The case of the assessee was selected for scrutiny under CASS and statutory notices were duly issued and served on the assessee. In response to notice issued u/s 142(1) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing shares at a high premium. Finally the AO treated the share capital/share premium of Rs. 1,66,16,400/- as unexplained cash credit and added the same u/s 68 of the Act. 5. In the appellate proceedings, the Ld. CIT(A) dismissed the appeal of the assessee on the ground that these companies are fictitious company and have hardly any profit. The Ld. CIT(A) though recorded a finding that the identity and genuineness of the transaction were proved by the beneficiaries. The Ld. CIT(A) also noted that the finding of AO in para 7.2.2 that the director of the assessee company as well as the investing company failed to appear before the AO and therefore the condition as envisaged u/s 68 of the act could not be satisfied. 6. After hearing the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and merely harped on the non compliance of summons issued u/s 131 of the Act. Even in case we accept the observation of the AO as to non compliance of the summons u/s 131 of the Act by the assessee and also non productions of the directors of the investing companies even then the AO cannot make addition on the sole basis of non compliance. The case of the assessee find support from the decisions of various judicial forums which are discussed as under. We find support from the decision of Hon'ble Supreme Court in the case of CIT Vs Orissa Corporation Ltd. ([1986] 159 ITR 78 (SC) in which the Hon'ble Apex Court has held as under: "That in this case the respondent had given the names and addresses of the alleged creditors. It was in the know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d considerable force of the submissions of the learned Counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter creditworthiness. As rightly pointed out by the learned counsel that the Ld. CIT(A) has taken the trouble of examining of all other materials and documents viz., confirmatory statements, invoices, challans and vouchers showing supply of bidi as against the advance. Therefore, the attendance of the witnesses pursuant to the summons issued in our view is not important. The important is to prove as to whether the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court observation we are constrained to hold in this matter that the Tribunal has not adjudicated upon the case of the assessee in the light of the evidence as found by the Ld. CIT(A). We also found no single word has been spared to up set the fact finding of the Ld. CIT(A) that there are materials to show the cash credit was received from various persons and supply as against cash credit also made. Hence, the judgment and order of the Tribunal is not sustainable. Accordingly, the same is set aside. We restore the judgment and order of the Ld. CIT(A). The appeal is allowed." 6.2. The case of is also covered by the decision of the coordinate bench in ITO Vs M/s Cygnus Developers India Pvt. Ltd. ((ITA No. 282/Kol/2012)) the oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. In the light of the above factual position which is not disputed by the revenue, it cannot be said that the identity of the share applicants remained not proved by the assessee. The decision of the Hon'ble Allahabad High Court as well as ITAT, Kolkata Bench on which reliance was placed by the learned counsel for the assessee also supports the view that for non-production of directors of the investor company for examination by the AO it cannot be held that the identity of a limited company has not been established. For the reasons given above we uphold the order of Ld. CIT(A) and dismiss the appeal of the revenue." 6.3. Similar ratio has been laid down by the Hon'ble Mumbai High Court in the case of CIT Vs Orchid Industries (P) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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