Case Law Details
Brief of the Case
Delhi High Court held In the case of Principle CIT vs. Matchless Glass Services Pvt. Ltd. that the fact that a common address is shared by several companies may not be a sole ground to doubt the identity or the creditworthiness of the companies; however in the given circumstances there may be several factors, which viewed cumulatively, to doubt the veracity of the Assessee’s claims. In the given case, various factors i.e. the address is that of a Janta flat which is normally used as residence ; the said address is also stated to be residential address of several individuals, who are ostensibly not related to each other; large payments have been made in cash; shares are stated to have been subscribed at a premium even though the Assessee company has no track record and has not made any investment in traded securities yet it has attracted large subscriptions to its share capital, required to be considered for ascertaining whether the Assessee has established the creditworthiness of the persons as well as to the genuineness of the transactions. Matter remanded back to ITAT for fresh consideration.
Facts of the Case
The above proceedings emanate from the search and seizure operations under Section 132, which commenced on 14th October, 2008 in respect of “SVP Group of companies”. The Assessee was one of companies on whom a search and seizure operation was carried cut in connection with the issues of providing share capital contribution to the SVP Group of concerns. Along with the Assessee company 19 other such companies were covered U/s 153A. Based on the materials seized from the premises of SVP Group of companies with regard to the investment in shares mainly in cash, action u/s 153C was also initiated in respect of the 12 companies.
On 31st December, 2010, the AO passed assessment orders in respect of each of the AYs in question. The AO noted that search operations were conducted at the premises declared by the Assessee to be its registered office, however, no books of accounts or any other documents relating to the Assessee were found at the said premises. The address of the registered office of the company was that of a ‘Janta Flat’, which was used for residential purposes. It was also noted that in addition to the Assessee Company, there were six other companies that were declared to be located at the same address that had subscribed to the share capital of the core operational companies of the SVP Group.
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