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TMI Blog2025 (3) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... see received money and the genuineness of such transaction is on the assessee and the assessee miserably failed to prove so in the instant case ? 2. Whether the learned Income Tax Appellate Tribunal has committed substantial error in law in deleting the total addition of Rs. 2,82,00,000/- made under section 68 of the Act ignoring the judicial principles laid down in the matter of Pr. CIT vs. Swati Bajaj reported in 2022 SCC Online 1572 [Cal] wherein the Hon'ble High Court at Calcutta laid down guidelines on the manner in which the allegation against the assessee has to be considered ? 3. Whether the learned Income Tax Appellate Tribunal has committed substantial error in law in appreciating the principle which has been laid down by the Hon'ble Supreme Court in the case of Pr. CIT [Central]-1, Kolkata vs. NRA Iron & Steel Private Ltd. [412 ITR 161] [2020] 117 taxmann.com 752 [SC] ? 4. Whether the learned Income Tax Appellate Tribunal has committed substantial error in law in not following the judicial principles laid down in the matter of Pr. CIT 2, Kolkata [C]-2, Kolkata vs. M/s. BST Infratech Ltd. in ITAT/67/2024 dated 23.4.2024, which is an earlier decision of Hon'ble Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies, yet to escape from the rigor of section 68 of the Act, the assessee is also bound to prove the creditworthiness of the parties and also genuineness of the transaction. Thus, we are required to see as to whether this exercise has been done by the assessee. The Assessing Officer issued notices under section 133(6) for which reply has been stated to have been received. Summons was issued under section 131 on the directors of the assessee/company to appear personally and to produce various documents. However, the assessee filed written statement in response to the summons with photo identity of the directors of the invested companies but no reason was assigned as to why the directors did not appear in response to the summons. The Assessing Officer took up the case for discussion, took note of section 68 of the Act and held that there was no compliance from the assessee. The identity, the genuineness and creditworthiness of the share applicant companies have not been established against the primary issues regarding the due diligence permission, steps taken for protection of the fund and most importantly the reason for investment in the company with no track record and that to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered under clause (a) of sub-section (3) of section 143 of the Act. Apart from that it was held that not only the tax recovery officer-10/tax recovery officer-4, Kolkata was fully empowered to pass the order under section 143 of the Act and the question of the assessee raising the issue of jurisdiction beyond the prescribed time limit does not arise. 6. The next issue which was taken up for consideration is with regard to the correctness of the addition made under section 68 of the Act. The assessee among other things contended that the notices under section 133(6) of the Act was issued only out of 9 out of 30 shareholders and the details having been furnished, the assessee submitted that they have discharged burden cast upon them. Furthermore, the assessee submitted that the profit and loss account and the balance-sheet containing substantial income was before the Assessing Officer and, hence, creditworthiness was proved. Certain decisions were also referred to in support of such contention. The appellate authority, in our considered opinion, rightly noted the legal position that the onus is on the assessee to prove not only the identity of the share applicant but also the cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company were also found to be a group of persons. The accounts of the companies were audited by the same group of auditors. There are no activities apparent from the profit and loss provided except for receipt of interest and all companies have only furniture and computers as assets and there are no vehicles or office premises in the schedule of assets. Thus, noting all the facts the appellate authority held that the assessee has not discharged the onus under section 68 of the Act. More importantly the appellate authority noted that the first two entities are individuals and they are promoters of the assessee company and the shares issued to them are not added as premium. This peculiar aspect was noted and it was pointed out that the promoters do not share the view of the other companies who have subscribed to the shares at premium, about the prospects of the assessee company. Moreover, the assessee has not provided any documentary evidence for the creditworthiness of the promoters, i.e., Aditya Mumdhra & Sonali Mundhra. It was found that the remaining 28 companies have contributed Rs. 2.77 crores towards the share capital at par along with share premium and the creditworthin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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