9911796707
TMI Blog2024 (8) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings and furnished the details as called for by the AO. During the course of assessment proceedings, the AO observed that the directors of the share assessee company and allottee companies were common. The statement of common director Mr. Raj Kumar Damani was recorded u/s 131 of the Act which was also extracted by the AO from page 1 to 4 in para 2 in the assessment order. Shri Raj Kumar Damani, in his statement in reply to question no. 3, submitted that he was the director of assessee company, the equity shares of which were allotted to two group companies namely M/s Genesis Tie-up Pvt. Ltd. and M/s Kippy Engineering Pvt. Ltd. In reply to question no. 4, he stated that the equity shares were allotted to these group companies at face value of Rs 10/- each at a premium of Rs. 80/- per share and subscription amounts were received through banking channel. In reply to question no. 8, the said director stated that due to requirement of funds in the assessee company, share allotments were made to these group companies. It was also stated that the proceeds raised from issue of shares were utilized for purchase of flat which has also been noted by the AO at page no. 4 para 1 in the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies of the assessee with common directors and shareholders and that the statement of the common director of Shri Raj Kumar Damani was also recorded by the AO during the assessment proceedings and was extracted in the assessment order. The ld AR argued that in the statement recorded of Shri Raj Kumar Dhamani, all the queries were answered confirming the issue of share capital/ share premium of face value of Rs. 10/- at a premium of Rs. 80/-. The Ld. A.R also stated that the AO has also noted in the assessment order that the assessee company was carrying on the business of dealing fabric and the fact of having done sales and purchases of fabrics during the year were duly mentioned by the AO in the assessment year itself. The Ld. A.R also referred to the notices issued u/s 133(6) of the Act by the AO to both the subscribers in order to verify the investments which were furnished with all details/ information and the AO has not disputed / doubted these evidences. The Ld. A.R stated that merely on the basis of general observations that the assessee has routed its own funds to these companies is a presumption and is incorrect and against the facts on record as it is not the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 68 of the Act namely identity, creditworthiness and genuineness were satisfied. The Ld. D.R heavily relied on the decision of Hon'ble Calcutta High Court in the case of Balgopal Merchants Pvt. Ltd. vs. PCIT in ITAT/232/2023 (IA No. GA/ 2023) order dated 13.05.2024 wherein the Hon'ble Court has held that mere filing of documents by the assessee and receipt of money through banking channel do not per se prove the three ingredients as envisaged in Section 68 of the Act. The Ld. D.R therefore prayed that in view of the said decision of Hon'ble Calcutta High Court the appeal of the assessee may kindly be dismissed. 7. In the rebuttal the Ld. A.R stated that the facts of the case as decided by the Hon'ble Jurisdictional High Court in the case of Balgopal Merchants Pvt. Ltd. (supra) were clearly distinguishable. The Ld. A.R drew our attention that in para 3 in that decision of the Hon'ble Calcutta High Court wherein it was noted by the AO summons were issued to the directors of the assessee company and there was no compliance to the summons and therefore identity, genuineness and creditworthiness of the share applicants were not established. The Ld. A.R also drew attention to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector on the subscribing companies and his statement was recorded by the AO. The said director Shri Raj Kumar Damani has admitted to have issued equity shares from the assessee company to two group companies namely M/s Genesis Tie-up Pvt. Ltd. and M/s Kippy Engineering Pvt. Ltd. and it was also stated that the subscribing companies having substantial resources available to invest in the assessee company. It was also stated that the subscription proceeds were utilized for the purchase of flat. The statement of the said director is extracted by the AO from page 1 to 4. We note that despite all these evidences being furnished as stated above, the AO has only doubted the business of the assessee as well as the investing companies without disputing the evidences filed by the assessee or pointing out any defect/deficiency therein. The Ld. CIT(A) simply affirmed the order by relying on the preponderance of human probability thereby ignoring the facts on record. We note that in the present case the assessee or its group companies are not shell companies engaged in providing accommodation entries and therefore we find that theory of the AO that the assessee's own money routed through these ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
