Case Law Details
ITO Vs Sharda Shree Agriculture & Developers Pvt. Ltd. (ITAT Raipur)
ITO vs. Sharda Shree Agriculture & Properties Pvt. Ltd. ITA NO.84/RPR/2017 (Date of Order : 05.08.2022) relating to addition on account of Share Application Money from two Kolkata based companies. Entire Addition was deleted
In our considered view, as the failure on the part of the A.O to call for the requisite information by issuing notices/letters u/s. 133(6) of the Act to the aforesaid investor companies well within a reasonable time had resulted to the delay in furnishing of the requisite reply by them, therefore, the same by no means can be attributed either to the assessee or to the investor companies. Be that as it may, it is a matter of fact borne from the record that the requisite details as were called for by the AO vide his notices/letters issue under Sec. 133(6) had been furnished by the investor companies and the same are found available on the assessment record. Before us the ld. DR had not rebutted the aforesaid factual position, i.e, furnishing of the requisite details by the investor companies pursuant to the queries that were raised by the AO vide notices/letters issued under Sec. 133(6) of the Act. Apart from that, we find that though the assessee in the course of the proceedings before the CIT(Appeals) had furnished substantial documentary evidences to support the authenticity of its claim of having received share application money from the aforesaid investor companies, i.e. M/s. Neel Kamal Vanijya Pvt. Ltd and M/s Chandrika Vanijya Pvt. Ltd., viz. copies of the share application forms, audited financial statements, copies of the bank statement, confirmations of the share applicants, copies of the resolution of board of directors etc. which though were forwarded by the CIT(Appeals) to the A.O with a direction to furnish his remand report, but the A.O had failed to rebut much the less dislodge the claim of the assessee of having received genuine share application money from the aforesaid share subscribers.
In our considered view, as both the aforementioned investor companies had placed on record supporting documentary evidences which duly substantiated their identity and creditworthiness, as well as the genuineness of the transaction in question, which had neither been rebutted by the A.O in the course of the original assessment proceedings; nor in the remand proceedings, therefore, the department without dislodging the primary onus that was duly discharged by the assessee could not have drawn adverse inferences as regards the transactions in question. Apart from that, we find substantial force in the claim of the Ld. AR that now when the A.O i.e. ITO, Ward-11(1), Kolkata while framing the assessment of one of the investor company, viz. M/s. Neel Kamal Vanijya Pvt. Ltd. had accepted the share capital of Rs.11.67 crore that was received by it in A.Y.2009-10 against which it had allotted 233470 shares, and thereafter it had not raised any fresh capital upto the date of subscription of the shares of the assessee company, therefore, it could safely be concluded that the source of availability of funds with the said investor company was not only proved to hilt, but in fact the same had also been accepted by the department. We, thus, in terms of our aforesaid observations concur with the view of the CIT(Appeals) that now when the source of the share application money of Rs.1,10,50,000/- received by the assessee company from one of the investor, viz. M/s. Neel Kamal Vanijya Pvt. Ltd. is proved beyond doubt and had not been rebutted by the A.O, therefore, there was no justification on his part in drawing adverse inferences qua the said transaction.
As regards the share application money of Rs.1,33,50,000/- that was received by the assessee company from the other investor company, viz. Chandrika Vanijya Pvt. Ltd., we find that though the documentary evidences substantiating the identity, creditworthiness and genuineness of the transaction in question that were filed by the assessee were confronted by the CIT(Appeals) to the A.O with a direction to file a remand report,, however, the A.O in the said case too had failed to rebut the documents as were available before him. Apart from that, the fact that the aforesaid share application money had been refunded by the assessee company in two tranches had also been lost sight of by the A.O while drawing adverse inferences as regards the authenticity of the transaction in question.
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