9911796707
TMI Blog2025 (2) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... by treating the same as unexplained cash credit u/s 68 of the Act. 03. The facts in brief are that the assessee filed the return of income on 31.10.2007, declaring total income at Rs.8,63,420/-. The case of the assessee was selected for scrutiny through Computer Assisted Scrutiny Selection (CASS) and statutory notices along with questionnaires were duly issued and served upon the assessee. During the instant financial year the assessee has issued 2,07,000 equity shares thereby raising share capital of Rs.1,50,00,000/- from five parties the details whereof are given hereunder:- Sl No. Name of Allottee No. of shares allotted Amount invested 1. Good Point Traders Pvt. Ltd. 50,000 30 Lac 2. Innova Commercial Pvt. Ltd. 50,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the show cause notice, the ld. AO already passed the order on 20.12.2019, making addition in respect of three parties as stated in above in the assessment framed. 05. Aggrieved assessee preferred an appeal before the ld. CIT (A). However, the same was dismissed by the ld. CIT (A) on the ground that the replies to the notices issue du/s 133(6) of the Act from three parties as stated above, were received on 23.12.2019. However the balance sheet, Profit and Loss account furnished by the parties related to F.Y. 2015-16 instead of F.Y. 2016-17. Since, the application money was received in F.Y. 2016-17, the ld. CIT (A) dismissing the appeal of the assessee by observing as under:- ""vii. The appellant assessee has stated that, the three shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06. The ld. AR vehemently submitted before us that the first appellate authority sustained the addition on the ground that the share applicants furnished before the ld. AO the replies to the notice issued u/s 133(6) of the Act on 23.12.2019 and also that the balance sheet and Profit and Loss account for F.Y. 2015-16 were filed, whereas the instant case of the appellant was for F.Y. 2016-17. The ld. AR argued that this is purely in inadvertent mistake on the part of the subscribers. The ld AR placed before the Bench the audited accounts of three applicants namely; Aakansha Advisory Services Pvt. Ltd, Sunirmiti Mercantile Pvt. Ltd. and Arihant Enterprises Ltd. for F.Y. 2016-17. The ld. AR further submitted that even on perusal of the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Revenue has plenary powers to enforce the attendance of the subscribers and even if though share applicants have not replied to the notices issued u/s 133(6) of the Act on the stipulated time. The ld AR submitted that the ld. AO has even power to issue summon u/s 131 of the Act to the director of these companies. The ld. AR further submitted that even the ld. CIT (A)'s powers are co-terminus with the power of the ld. AO and therefore, the ld. CIT (A) could have assumed the power and issued notice u/s 133(6) of the Act to the share applicants and summons u/s 131 of the Act. In defense of his argument the ld. AR relied on the relied on the decision of Hon'ble Apex court in the case of CIT vs. Orissa Corporation Pvt. Ltd. (1986) 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or F.Y. 2015-16, and not for F.Y. 2016-17. The assessee has filed all these information before us for F.Y. 2016-17. After examining the balance sheets of three subscribers namely; Aakansha Advisory Services Pvt. Ld., Sunirmiti Mercantile Pvt. Ltd and Arihant Enterprises Ltd. We find that they have adequate creditworthiness to make investments in the assessee company. Even on the basis of balance sheet and Profit and Loss account for F.Y. 2015-16, the creditworthiness of the assessee's subscribers could be judged. Therefore, considering the facts on record, we are of the view that assessee has discharged its onus cost upon it by the statute and in our opinion, addition cannot be made mainly on the ground that notice issued u/s 133(6) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the creditors could not be served or they failed to attend before the Assessing Officer, cannot be a ground to treat the loans taken by the assessee from those creditors as non-genuine in view of the principles laid down by the Supreme Court in the case of Orissa Corporation (1986) 159 ITR 78. In the said decision the Supreme Court has observed that when the assessee furnishes names and addresses of the alleged creditors and the GIR numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non- compliance of summons issued by the Assessing Officer under section 131, by the alleged credi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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