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TMI Blog2024 (8) TMI 1533X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld CIT (A) erred in confirming the addition of share capital and premium issued to 9 share applicants on the ground that the assessee denied to produce their documents when the assessee never denied and the documents were already on record and must have been submitted to CIT (A) by AO along with the remand report. 4 For that the Ld CII(A) erred in confirming the addition of share capital and premium issued to remaining 21 share applicants on the ground that their creditworthiness is not proved when they had sufficient amount of reserves & surplus. 5. For that the Ld CIT (A) erred in confirming the addition of share capital and premium issued to remaining 21 share applicants on the ground that the genuineness of the transaction due to high share premium is not proved when charging high share premium cannot be a ground to make the addition. 6. For that the Ld CIT (A) erred in confirming the addition of share capital and premium on the ground that the directors of the share applicants were not produced when it is not required as per law and various judicial decisions. 7. For that on the facts and in the circumstances of the case the addition was not valid and is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. However, this plea taken by the assessee was rejected by Ld. CIT (A) observing that case of the assessee was covered under clause (a) of sub section (3) of Section 124 of the Act as the assessee did not challenge the jurisdiction of AO within the expiry of one month from the issuance of notice under section 142(1) of the Act on 31.10.2024 and claim of the assessee was rejected. 5. Dissatisfied with the above order, assessee is in appeal before this Tribunal raising multiple grounds on the jurisdictional issue as well as on the merits of the case. The Ld. Counsel for the assessee placed on record a paperbook containing 463 pages in support of corroborating the transaction of share capita including share premium raised during the year. The Ld. Counsel for the assessee has made detail and elaborate submissions on the jurisdictional issue. He placed before the bench on the merit of the case to demonstrate that onus discharge by the assessee in terms of section 68 of the Act. He categorically pointed out that the Ld. AO himself noted in the assessment proceedings that the assessee has furnished sheaves of paper documents in response to the summon issued. The Ld. Counsel pointed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee submitted that in order to establish the identity and creditworthiness of the shareholders and genuineness of the transactions, assessee has submitted all the relevant details and documents in the course of assessment as well as appellate proceeding, details of which are tabulated and is extracted below from the index of the paper book for ease of reference: SI No. Particulars Page No. Filed before 1 List of share application to whom shares issued during the year 1 C.I.T(A) & A.O. 2 Documents of M/s Lucky Prime Financial Consultants Pvt. Ltd. Audited financial statements for FY 2011-12 Present ROC Master Data (Active) 2-17 Do 3 Documents of M/s Subhalaxmi Vincom Pvt. Ltd. Audited financial statements for FY 2011-12 Present ROC Master Data (Active) 18-33 Do 4 Documents of M/s Subhshree Tradelink Pvt. Ltd. Audited financial statements for FY 2011-12 Present ROC Master Data (Active) 34-47 Do 5 Documents of M/s Navdurga Dealer Pvt. Ltd. Audited financial statements for FY 2011-12 Present ROC Master Data (Active) 48-60 Do 6 Documents of M/s Shivganga Tradelink Pvt. Ltd. Audited financial statements for FY 2011-12 Present ROC Maste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Share Allotment Advice Bank Statement highlighting the payment made for purchase of shares ITR Acknowledgement for Asst yr 2012-13 Computation of Income Financial Statements for FY 2011-12 266-280 Do 24 Documents of Mrs Sonali Mundhra Notice u/s 133(6) and its reply filed before AO along with enclosures consisting: Voter ID (Identity Card) PAN Card Share Allotment Advice Bank Statement highlighting the payment made for purchase of shares ITR Acknowledgement for Asst yr 2012-13 Computation of Income Financial Statements for FY 2011-12 281-292 Do 25 Documents of M/s Accent Commosales Pvt Ltd Notice u/s 133(6) and its reply filed before AO along with enclosures consisting: Share Allotment Advice Voter ID (Identity Card) PAN Card Share Allotment Advice Bank Statement highlighting the payment made for purchase of shares ITR Acknowledgement for Asst yr 2012-13 Computation of Income Audited Financial Statements for FY 2011-12 Present ROC Master Data (Active) 293-327 Do 26 Documents of M/s Ajay Dealers Pvt Ltd Notice u/s 133(6) and its reply filed before AO along with enclosures consisting: Share Allotment Advice PAN Card Share Application Form Bank S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered with ROC and are assessed to income tax. He further stated that these subscribers had confirmed the transactions, filed relevant papers and documents and also explained the source of funds in their hands for making investment in the assessee company. He thus, emphasized that assessee had discharged its primary onus casted upon its u/s. 68 of the Act. According to him, the onus thus shifted to the Ld. AO to disprove the material placed before him, without doing so, the addition made by the Ld. AO is based on conjectures and surmises and, therefore, cannot be sustained. He pointed that Ld. AO for reasons known to him alone, did not choses to issue notices/summons u/s. 133(6)/131 to the share subscribers. 9. Ld. Counsel submitted that instead of pointing out any defect or discrepancy in the evidence and the details furnished by the assessee, Ld. AO proceeded to take adverse inference only on the ground that the directors of the assessee did not appear personally before him. In this respect he placed reliance on the decision of Hon'ble Jurisdictional High Court of Calcutta in the case of Crystal Networks Put. Ltd. v. CIT in ITA 158 of 2002 dated 29.07.2010. 10. The Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Suppliers Pvt. Ltd. 2,000 20,000 980,000 1,000,000 152,619,21 13 Lovely Tradelink Pvt. Ltd. 1,250 12,500 987,500 1,000,000 27,352,78 14 Manju Real Estate Consultants Pvt. Ltd. 1,250 12,500 987,500 1,000,000 50,846,02 15 Pitambari Tie Up Pvt. Ltd. 1,250 12,500 987,500 1,000,000 158,420,852 16 Indralok Investment Consultants Pvt. Ltd. 1,875 1,875 1,481,20 1,500,000 67,044,054 17 Puja Dealtrade Pvt. Ltd. 1,250 1,250 987,500 1,000,000 60,051,181 18 Iris Commosale Pvt. Ltd. 1,000 1,000 790,000 800,000 93,441,362 19 Namrata Tie Up Pvt. Ltd. 1,875 18,750 1,481,250 1,500,000 68,793,619 20 Matashree Barter Pvt. Ltd. 1,875 18,750 1,481,250 1,500,000 61,043,097 21 Mridang Commosales Pvt. Ltd. 1,875 18,750 1,481,250 1,500,000 2,757,933 22 Aditya Mundhra 30,000 300,000 - 300,000 11,502,355 23 Sonali Mundhra 10,000 100,000 - 100,000 295,393,405 24 Accent Commosales Pvt Ltd 3,875 38,750 2,461,250 2,500,000 51,101,709 25 Ajay Dealers Pvt Ltd 1,250 12,500 987,500 1,000,000 68,805,279 26 Ajay Vanijya Pvt Ltd 1,250 12,500 987,500 1,000,000 43,452,081 27 Aprajita Tie up Pvt Ltd 1,875 18,750 1,48 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Network Pvt. Ltd. v. CIT (supra) which held as under: "We find 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 CIT(Appeals) 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 cash credit was received as against the future sale of the produce of the assessee or not. When it was found by the CIT (Appeal) on fact having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact finding." 16. Ld. AO has not bothered to discuss or point out any defect or deficiency in the documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of Hon'ble jurisdiction High Court of Calcutta in the case of CIT Vs. Sagun Commercial P. Ltd. (ITA No. 54 of 2001 dated 17.021.2011) wherein it was held as under: "After hearing the learned advocate for the appellant and after going through the materials on record, we are at one with the Tribunal below as well as the Commissioner of Income-tax (Appeals) that the approach of the Assessing Officer cannot be supported. Merely because those applicants were not placed before the Assessing Officer, such fact could not justify disbelief of the explanation offered by the assessee when details of Permanent Account Nos. payment details of shareholding and other bank transactions relating to those payments were placed before the Assessing Officer. It appears that the Tribunal below has recorded specifically that the Assessing Officer totally failed to consider those documentary evidence produced by the assessee in arriving at such conclusion. We, therefore, find no reason to interfere with the decision passed by the Commissioner of Income-tax (Appeals) and the Tribunal below and answer the questions formulated by the Division Bench in the affirmative and against the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re capital and share premium can be assessed as unexplained cash credit merely for high share premium even though the identities and creditworthiness of the share applicant and genuineness of the transactions have been established. What is held by the Hon'ble ITAT is that revision proceedings u/s 263 are valid where the transactions have been accepted as genuine without making proper enquiries. 20. Further, in the judgment of Hon'ble Supreme Court in the case of NRA Iron & Steel Pvt. Ltd. (412 ITR 161), Ld. AO has made extensive enquiries and some of investors were found to be non-existent. Upon going through the facts involved in that judgment, it is noted that, in the decided case, the AO had made extensive enquiries and from that he had found that some of the investor companies were non-existent, which is certainly not the case before the undersigned. In the said decided case, certain investor companies also failed to produce their bank statements for proving the source for making investments in assessee company. In the facts of the present case however, not only have the shareholders furnished their bank statements and investment schedules to establish the source of funds ..... X X X X Extracts X X X X X X X X Extracts X X X X
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