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TMI Blog2025 (5) TMI 1653X X X X Extracts X X X X X X X X Extracts X X X X ..... areholders not established. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidences in violation of rule 46A of the Income Tax Rule, 1962 without giving an opportunity to the Assessing Officer. 3. Any other ground that the Revenue may rise before or during the proceedings before the Hon'ble ITAT. 4. It is, therefore, prayed that the order of the CIT(A) be set aside and that of the AO be restored to the above extent." 3. Succinctly, the factual panorama of the case is that assessee before us is a private limited company. Facts of the case is that return of income for assessment year (AY) 2017-18, declaring total loss of Rs. (-)1,86,94,639/-, was e-filed on 12/10/2017. The return of income so filed, was processed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') without any modification. Since, the books of accounts of the assessee are liable to get audited u/s. 44AB of the Act, audit report in Form No. 3CB & 3CD dated 08.07.2017, were also e-filed on E-filing portal. Subsequently, the return of income so filed, was selected for scrutiny through CASS under Complete criteria to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditworthiness in respect of share capital to the tune of Rs. 10,07,86,700/- (Rs.11,40,55,000- Rs. 1,32,68,300), however, the assessee had failed to submit satisfactory explanation in respect of Rs. 1,32,68,300/-. 5. Aggrieved by the order of the Learned CIT(A), the Revenue is in appeal before us. 6. Learned Senior DR for the Revenue submitted that in respect of addition sustained by the ld. CIT(A) to the tune of Rs. 1,32,68,300/-, the assessee has miserably failed to explain the identity, creditworthiness, and genuineness of the share capital. It is seen that total annual earnings as per the copy of Income Tax Returns (ITR) of these shareholders are very less and these shareholders have heavy loan in their personal Balance Sheet, therefore, it is impossible to make investment in the assessee- company. Section 68 requires the three ingredients i.e. (i) identity of the lender/subscriber, (ii) Creditworthiness of the lender/subscriber and (iii) genuineness of the transaction. As per the innumerable cases decided on the issue, it is a settled position of law that the initial burden is cast on the assessee, to prove these three ingredients. The assessee company has miserable failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,32,68,300/-, should not be treated as a genuine, based on the same facts and circumstances. We find that assessee has filed the details, before assessing officer, such as, identity proofs, acknowledgements of returns of income for the assessment year under consideration and the immediately preceding assessment year, bank statements / passbooks, copies of balance sheet for the previous year relevant to the assessment year under consideration and immediately preceding previous year of the said persons to establish genuineness of transactions, identity and creditworthiness of shareholders. The assessee also submitted the relevant documents and evidences of the third parties from whom they took the loan. Thus, the ingredients of section 68 of the Act, that is, identity and creditworthiness of the lenders and genuineness of transaction were satisfactorily proved by the assessee. The ld. Counsel for the assessee in support of his arguments submitted detail of share applicants along with relevant case laws which has been duly perused. 9. We find that shareholders have furnished the entire data of his financial statements which are not in doubt and the shareholder have also furnished the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of COMMISSIONER OF INCOME TAX KOLKATA-III Versus DATAWARE PRIVATE LIMITED ITA No. 263 of 2011 Date: 21st September, 2011, held as follows: "9.6 "In our opinion in such circumstances, the Assessing officer of the assessee cannot take the burden of assessing the profit and loss account of the creditors himself is an income tax assessee. After getting the information that the creditor is assessed under the Act, the assessing officer should enquire from the Assessing Officer of the creditor as to the genuineness" of the transaction and whether such transaction has been accepted by the Assessing officer of the creditor but instead of adopting such course, the Assessing officer himself could not enter into the return of the creditor and brand the same as unworthy of credence. 9.7 So long it is not established that the return submitted by the creditor has been rejected by its Assessing Officer, the Assessing officer of the assessee is bound to accept the same as genuine when the identity of the creditor and the genuineness" of transaction through account payee cheque has been established. 9.8 We find that both the Commissioner of Income Tax (Appeal) and the Tribunal below fol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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