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TMI Blog2024 (9) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... B. Whether on the facts and circumstances of the case, the Ld. ITAT is correct in ignoring the fact that assessee has directly or indirectly received share capital and premium from entities/persons not having creditworthiness to provide such huge amount of unsecured loans? C. Whether the Ld. ITAT has erred in holding that share capital/premium received was explained ignoring the judgments in the cases of NRA Iron and Steel Pvt. Ltd. dated 05.03.2019, Navodaya Castlers Pvt. Ltd. (Delhi) in ITA No. 320/2012 and Youth Construction Pvt. Ltd. 357 ITR 197 and CIT Vs. NR Portfolio Pvt. Ltd. (Delhi) in ITA No. 1018/2011? D. Whether on the facts and circumstances of the case, the Ld. ITAT is correct in deleting the addition completely ignoring the evidentiary value of statement under Section 132(4) of the Act of the director of the Kandhari group companies, Shri Pradeep Kumar Shastri and confirmed by Sh. Varinder Pal Singh Singh Kandhari Where in he had admitted surrender of his unaccounted income in the form of bogus share capital/premium? E. Whether on the facts and circumstances of the case, the Ld. ITAT is correct in ignoring the facts that the fund which was credited in the bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premium by two entities with the assessee company. On a careful reading of the assessment orders, it is very much clear that the sole basis for the additions made u/s. 68 of the Act at the hands of the assessee company is the statement recorded from one, Mr. Praveen Kumar Shastri, stated to be the director of Kandhari group of companies. On a perusal of the observations made by the Assessing Officer in the assessment order, it can be seen that in the statement recorded, the concerned person has stated that the share capital and share premium received by M/s. MSD Finance India Pvt. Ltd. and M/s. Indo Gulf Infrastructure Investment Pvt. Ltd., and in turn, invested with assessee company, were nothing but these two entities income from undisclosed sources, which are introduced in the names of other entities. He has also stated that the concerned person admitted to offer certain amount of income at the hands of M/s. MSD Finance India Pvt. Ltd. and M/s. Indo Gulf Infrastructure Investment Pvt. Ltd. Aforesaid facts recorded by the Assessing Officer clearly demonstrate that, at best, the share capital and share premium invested in assessee company were unexplained income of M/s. MSD Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing officer is unsustainable on the various legal grounds and on facts of the case. The addition made in the case of the appellant is deleted. Therefore, ground no. 3 is allowed."" However, it has been pointed out to us that the unexplained money which formed the corpus of the share application already stood taxed in the hands of M/s Indogulf Infrastructure Investment Pvt. Ltd. and M/s MSG Finance India Pvt. Ltd. This becomes evident from a reading of paragraph 4.5 of the assessment order dated 29 December 2016, which is extracted here in below:- "4.5 During the course of search action conducted at the office premises of Sh. Varinder Pal Singh Kandhari at Plot no. 237-238, Udyog Vihar, Gurgaon on 28/03/2015, the above facts are confronted to Mr. Pradeep Kumar Shastri, Director in Kandhari group companies, who had admitted that a part of share premium received by M/s Indogulf Infrastructure Investment Pvt. Ltd and M/s MSG Finance India Pvt Ltd which was further given to M/s Heritage Beverages Pvt. Ltd and M/s Versatile Polytech Pvt. Ltd was nothing but its own unexplained income from undisclosed sources of these two companies introduced in the names of other entities. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndogulf Infrastructure Investment Pvt. Ltd in F.Y. 2008-09 and share premium of Rs. 3,50,00,000/- introduced by M/s MSG Finance India Pvt. Ltd in F.Y. 2010-11 cannot be explained. I am unable to explain the source of above mentioned two amounts totalling to Rs. 12,13,36,000/- (8,63,36,000+3,50,00,000) in words Rs. Twelve crore thirteen lakh and thirty six thousand only. To buy peace of mind and avoid litigation I hereby offer a sum of Rs. 8,63,36,000 in the hands of M/s Indogulf Infrastructure Investment Pvt. Ltd in F.Y. 2008-09 and a sum of Rs. 3,50,00,000/- in the hands of M/s MSG Finance India Pvt. Ltd in the F.Y. 2010-11 as additional income over and above the income already declared in the ITRs of the respective aforesaid companies. I will pay the due tax on these amount along with the due interest as per I.T. Act, 1961 as early as possible. I am offering this income with request that penalty under the income tax act may not be initiated, I am submitting balance sheet set of above said two companies." 4. We note that an identical question arose for consideration in Principal Commissioner of Income Tax-Central-I v. Surya Agrotech Infrastructure Limited 2023 SCC OnLine Del 5530 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in holding that the assessee was entitled to write off the excess income shown in the earlier years, in as much as the same income cannot be taxed twice, once in the earlier years and again in the year under consideration. 18. In the case of CIT v. K. S. M Guruswamy Nadar and Sons, (1984) 149 ITR 127, it was held that when there are two separate additions, one on account of suppression of profit and another on account of cash credit, it is open to the assessee to explain that the suppressed profits had been brought in as cash credits and one has to be telescoped into the other resulting in only one addition; and that the Tribunal was right in its view in telescoping the additions made towards the cash credits. 19. In the case of M/s M.R. Shah Logistics Pvt Ltd v. DCIT, (2018) SCC OnLine Guj 4850, the Gujarat High Court held that once a company disclosed the unaccounted cash amount in the Income Declaration Scheme, 2016 and paid tax there on, upon utilization of the same towards investment in share capital of the assessee company through various companies, the same could not be again subjected to tax in the hands of the appellant assessee. 20. In the case of B. Nanji Enterpri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) read with Section 245D(7) of the Act. 23. To recapitulate, in the present case, the material on record reflects that the Assessing Officer throughout the proceedings placed heavy reliance on the statement of Shri Shekhar Aggarwal to the effect that the undisclosed income of Priya Gold Group of Companies was routed in the form of share capital of the respondents/assessee companies by way of accommodation entries from Kolkata based entry provider companies and such share capital is liable to be taxed as income in the hands of the respondents/assessee companies. At the same time, it is also not in dispute that Surya Food & Agro Limited, the flagship company of the group has already offered the said undisclosed income to the tune of Rs. 49,12,00,000/- to tax before the Settlement Commission, which income was enhanced by the Commission to Rs. 55,77,00,000/- and the final order of the Settlement Commission having not been challenged by either side has attained finality. It is also not in dispute that before the Settlement Commission the flagship company specifically declared that the undisclosed income which was offered before the Settlement Commission had been applied by way of sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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