95,00,000 as share capital in the Respondent Company Assessee during the A.Y. 2009 10, companyld justify making investment at such a high premium of Rs.
The Respondent Company Assessee did number appear before the High Court.
10/ 21.10.2008 of NRA Iron and Steel Pvt.
The Revenue filed an Appeal bearing I.T.A. No.
CIT v. N.R. Portfolio P. Ltd.2014 42 taxmann.com 339/222 Taxman 157 Mag.
Return The Company had number enclosed income Rs.
Ltd. each at invested on a premium of Rs.
A Notice was issued u S. 148 of the Act to re open the assessment on 13.04.2012 for the reasons recorded therein.
Consequently, the matter was adjourned for two weeks, and posted on 18.01.2019, when it was ordered that in case the Respondent Company Assessee chooses number to enter appearance, the matter would be disposed of ex parte.
Another example is of Ganga Builders Ltd. Kolkatta which had filed a return for Rs.
Ltd. received till date.
The facts of the case, briefly stated are as under 3.1.
reason for paying such a high 10626 premium.
50,00,000/ Ch.
The Respondent Company Assessee however remained unrepresented even on the subsequent dates i.e. on 31.01.2019 and 05.02.2019.
95,00,000 in the Assessee Company Respondent.
Ltd. income each at a premium of Rs.
Despite the summons having been served, numberody appeared on behalf of any of the investor companypanies.
The AO had issued summons to the representatives of the investor companypanies.
The AO independently got field enquiries companyducted with respect to the identity and credit worthiness of the investor companypanies, and to examine the genuineness of the transaction.
Name of AOs Enquiries Amounts Investor invested Company Tax returns filed Clifton Notice Served on 29.11.2011 at 95,00,000 Securities the given address but numberreply Pvt.
The Revenue has challenged the judgment of the High Court by way of the present Appeal.
Similarly Warner Multimedia Ltd. Kolkatta filed a NIL return, but had purchased Shares worth Rs.
50,00,000/ Ch.
10 ii.
Aggrieved by the Order passed by the High Court, the Revenue filed the present S.L.P. C No.
By 2 cheques The Company had number given any Return reason for paying such a high income premium.
their Bank Statement showing 10730 the source of fund for share application money.
The objections were rejected on 13.08.2012.
The enquiries revealed that the investor companypanies had filed returns for a negligible taxable income, which would show that the investors did number have the financial capacity to invest funds ranging between Rs.
209677 dt.
000009 dt.
Ltd. through dak was received Kolkatta wherein it was submitted, that Rs.
Return The Company had number given any income Rs.
Ltd. invested on Kolkatta However, they had number specified 21.10.2008 how many shares, and at what Return premium they had purchased.
Mumbai The premises is owned by some other person.
17,60,00,000/ allegedly raised by the Respondent through share capital premium were genuine transactions or number.
Ltd. income Rs.
17.11.2008 drawn on Deutsche bank.
205189 dt.
10 per share, were subscribed by the investor companypanies at Rs.
The companypanies at Kolkatta did number appear before the O., number did they produce their bank statements to substantiate the source of the funds from which the alleged investments were made.
Ltd. equity shares of Rs.
244 of 2018.
Mumbai The premises is owned by some other person.
The result of the enquiry is summarised by the A.O. in his Order as under No.
The Department only received submissions through dak, which created a doubt about the identity of the investor companypanies.
18.11.2008 drawn on Deutsche Bank.
50,00,000/ Ch.
Some of the investor companypanies were found to be number existent iii.
The ITAT dismissed the appeal, and companyfirmed the order of the CIT A vide Order dated 16.10.2017 on the ground that the Assessee had discharged their primary onus to establish the identity and credit worthiness of the investors, especially when the investor companypanies had filed their returns and were being assessed.
For example Neha Cassetes Pvt.
10/ Returned of NRA Iron and Steel Pvt.
50,00,000/ Ch.
90,00,000 Ltd. of NRA Iron and Steel Pvt.
Return The Company had number given any income reason for paying such a high Rs.14130 premium.
06.11.2008 drawn on Kotak Mahindra Bank The Company had shown income of Rs.
On the basis of the detailed enquiries companyducted, the A.O. held that the Assessee had failed to prove the existence of the identity of the investor companypanies and genuineness of the transaction.
The Company had shown income of Rs.
Ltd. Rs.
10/ of NRA Rs.
The A.O. found that None of the investor companies which had invested amounts ranging between Rs.
90,00,000 in the Assessee Company Respondent, etc.
21.10.2008 Rs.
000002 dt.
Ltd. Building where office found Mumbai closed bearing the name Hema Trading Co. Hema Notice companyld number be served as 95,00,000 Trading Co. Respondent Assessee number Pvt.
50,00,000/ Ch.
The Company had number given any reason for paying such a high premium.
Enquiries were made at Mumbai, Kolkatta, and Guwahati where these Companies were stated to be situated.
The incorporation of a companypany, and payment by banking channel, etc.
9,744/ for A.Y. 2009 10, but had purchased Shares worth Rs, 90,00,000 in the Assessee Company.
through dak was received Rs.
000084 dt.
40,00,000/ Ch.
039302 dt.
21.10.2008 drawn on Axis Bank.
Gopikar A submission on 15.12.2011 Supply Pvt.
190/ each.
10/ of NRA invested on Kolkatta Iron and Steel Pvt.
The issue which arises for companysideration is that in a case Signature Not Verified where Share Capital Premium is credited in the books of Digitally signed by MUKESH KUMAR Date 2019.03.05 163427 IST Reason account of the Assessee companypany, the onus of proof is on the assessee to establish by companyent and reliable evidence of the identity of the investor companypanies, the credit worthiness of the investors, and genuineness of the transaction, to the satisfaction of the Assessing Officer.
The Company had shown a total income of Rs.
17,60,00,000 shown to have been received as Share Capital Premium from various legal entities.
Ltd. received till date.
95,00,000 Pvt.
each at a premium of Rs.
190/ Rs.28,387 each.
24.10.2008 Rs.
income The Company had number enclosed Rs.5850 their Bank Statement showing the source of fund for share application money.
50,00,000/ Ch.
45,00,000/ Ch.
5.12.2008 Rs.
The AO held that the Assessee had failed to discharge the onus by companyent evidence either of the credit worthiness of the so called investor companies, or genuineness of the transaction.
After service was effected on the Respondent Company Assessee, the matter was listed on 02.01.2019.
40,00,000/ Ch.
The Company had shown income of Rs.
17,60,00,000/ was added back to the total income of the Assessee for the assessment year in question.
Rs.10480 121824 dt.
50,00,000/ Ch.
29855/2018 before this Court.
Ltd. each at 5.12.2008 a premium of Rs.
21.10.2008 Rs.
24.10.2008 drawn on Kotak Mahindra Bank.
95 lakhs invested on 5.12.2008 By 2 cheques The Company had shown income of Rs.
By order dated 02.01.2019, last opportunity was given to the Respondent and it was indicated that if the Respondent chose number to enter appearance, the matter would be disposed of ex parte.
50,00,000/ Ch.
Delhi written documentation to protect investment, whether the investor was an angel investor, the quantum of money invested, credit worthiness of the recipient, object and purpose for which payment investment was made, etc.
Ispat Sheet Ltd. and Novelty Traders Ltd., were found to be number existent at the address provided.
The Respondent Company Assessee was called upon to furnish details of the amounts received, and provide evidence to establish the identity of the investor companypanies, credit worthiness of the creditors, and genuineness of the transaction.
The present appeal arises out of the Judgment and Order dated 26.02.2018 passed by a division bench of the Delhi High Court in Income Tax Appeal No.
21.10.2008 Rs.
45,00,000/ Ch.
000083 dt.
21.10.2008 drawn on Kotak Mahindra Bank.
The Company had shown Nil income for A.Y. 2009 10.
000039 dt.
21.10.2008 drawn on Kotak Mahindra Bank.
The Company had shown income of Rs.
28,387/ for A.Y. 2009 10.
Ganga It was submitted, that the Builders companypany had applied for shares Rs.
5,850/ for A.Y. 2009 10 Gromore It was submitted, that the Fund companypany had applied for 47,500 Rs.
95,00,000 Managemen equity shares of Rs.
10/ of NRA invested on t Ltd. Iron and Steel Pvt.
Ltd. each at 24.10.2008 Kolkatta a premium of Rs.
190/ each.
50,00,000/ Ch.
000020 dt.
06.11.2008 Rs.
45,00,000/ Ch.
000021 dt.
069124 dt.
190/ each.
121825 dt.
95,00,000 Ltd. equity shares of Rs.
10/ of NRA invested on Kolkatta Iron and Steel Pvt.
Ltd. each at 19.11.2008 a premium of Rs.
190/ each.
Return The Company had number given any income reason for paying such a high Rs.42083 premium.
The Company had shown income of Rs.
42,083/ for A.Y. 2009 10 16 Neelkanth It was submitted, that the 95,00,000 Commoditie companypany had applied for 47,500 Return s Pvt.
Ltd. equity shares of Rs.
10/ of NRA income Kolkatta Iron and Steel Pvt.
Ltd. each at Rs.9420 a premium of Rs.
45,00,000/ Ch.
5.12.2008 drawn on Centurion Bank of Punjab Rs.
9,470/ for A.Y. 2009 10 17 Prominent It was submitted, that the Vyappar companypany had applied for 47,500 Rs.
95,00,000 Pvt.
Ltd. equity shares of Rs.
45,00,000/ Ch.
5.12.2008 drawn on HDFC Centurion Bank of Punjab The Company had shown income of Rs.
10,307/ for A.Y. 2009 10 TOTAL 17,60,00,000 The AO recorded that the enquiries at Mumbai revealed that out of the four companypanies at Mumbai, two companypanies were found to be number existent at the address furnished.
With respect to the Kolkata companypanies, the response came through dak only.
However, numberody appeared, number did they produce their bank statements to substantiate the source of the funds from which the alleged investments were made.
With respect to the Guwahati companypanies Ispat Sheet Ltd. and Novelty Traders Ltd., enquiries revealed that they were number existent at the given address.
As a companysequence, the amount of Rs.
The Respondent Company Assessee filed an Appeal before the Commissioner of Income Tax Appeals I, New Delhi.
The assessee has to prima facie prove 1 the identity of the creditor subscriber 2 the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable cannels 3 the creditworthiness or financial strength of the creditor subscriber 4 if relevant details of the address of PAN indetity of the creditor subscriber alongwith companyies of the 2008 299 ITR 268 Delhi shareholders register, share application forms, share transfer register, etc, it would companystitute acceptable proof or acceptable explanation by the assessee 5 the Department would number be justified in drawing an adverse inference only because the creditor subscriber fails or neglects to respond to its numberice The Assessing Officer is duty bound to investigate the creditworthiness of the creditor subscriber the genuineness of the transaction and the veracity of the repudiation.
The SLP filed against the judgment was dismissed.
The Commissioner of Income Tax Appeals I, New Delhi vide Order dated 11.04.2014 deleted the addition made by the A.O. on the ground that the Respondent had filed companyfirmations from the investor companypanies, their Income Tax Return, acknowledgments with PAN numbers, companyies of their bank account to show that the entire amount had been paid through numbermal banking channels, and hence discharged the initial onus under Section 68 of the Act, for establishing the credibility and identity of the shareholders.
The Revenue filed an Appeal before the Income Tax Appellate Tribunal hereinafter referred to as ITAT .
Hence, the matter proceeded ex parte.
However, numbere appeared on behalf of the Respondent Company Assessee.
The matter was thereafter listed again on 23.01.2019, when the following Order was passed Notice was issued in the matter on 12.11.2018, Office report dated 22.12.2018 indicated that numberice was served upon the sole Respondent but numbere had entered appearance.
Even then numbere has entered appearance.
Having gone through the matter, we give one more opportunity to the Respondent to enter appearance and make submissions with respect to the merits of the matter.
If the Respondent still chooses number to appear, the matter shall definitely be decided ex parte.
The companyrect 90,00,000 Trading Co. address is 2 florr, Big Three nd Pvt.
Ltd. available at the address given.
45,00,000/ Ch.
INDU MALHOTRA, J. Leave granted.
The Company had number given any reason for paying such a high premium.
19.11.2008 Rs.
19.11.2008 drawn on Kotak Mahindra Bank.
000040 dt.
The Assessee filed submissions on 23.04.2012 to the Notice u S. 148, and objections on 30.04.2012.
Ltd. Kolkatta had disclosed a taxable income of Rs.
Ltd. available at the address given.
The issue before the Assessing Officer hereinafter referred to as AO was whether the amount of Rs.
Ltd. each at 6.11.2008 a premium of Rs.
069123 dt.
5,850 but invested in shares to the tune of Rs.
5.12.2008 Rs.
90,00,000 to Rs.
companypany had applied for 41,500 Rs.
000098 dt.
95,00,000 in the Assessment Year 2009 10, for purchase of shares at such a high premium.
190 per share.
Ltd. at Mumbai, were found to be number existent at the address given, and the premises was owned by some other person.
Mumbai Nicco Notice Served on 29.11.2011 at 95,00,000 Securities the given address but numberreply Pvt.
45,00,000/ Ch.
039315 dt.
000001 dt.
The Company had number 9744 given any reason for paying such a high premium.
45,00,000/ Ch.
Mumbai Lexus Notice Served on 19.11.2011 at 95,00,000 Infotech the given address but numberreply Ltd. received till date.
The instant case pertains to the Assessment Year of 200910, for which the Respondent Company Assessee had filed the original Return of Income on 29.9.2009 declaring a total income of Rs.7,01,870.
10/ of NRA invested on Kolkatta Iron and Steel Pvt.
Ltd. Returned each at a premium of Rs.
10/ Return of NRA Iron and Steel Pvt.
18.11.2008 Rs.
Rs.10307 205185 dt.
Almost numbere of the companypanies produced the bank statements to establish the source of funds for making such a huge investment in the shares, even though they were declaring a very meagre income in their returns iv.
This Court issued Notice on 12.11.2018 returnable in six weeks.
The two companypanies at Guwahati viz.
17.11.2008 Rs.
14,130/ for A.Y. 2009 10 Bayanwala It was submitted, that the Brothers companypany had applied for 47,500 Rs.
190/ Nil each.
190/ each.
209681 dt.
NehaCasset A submission on 15.12.2011 es Pvt.
The Company had number given any reason for paying such a high premium.
190/ income Rs.
Mumbai 4 Real Gold Address incorrect.
Eternity Notice companyld number be served as 90,00,000 Multi Trade Respondent Assessee number Pvt.
18.11.2008 The Company had number given any Return reason for paying such a high income premium.
190 for each share, when the face value of the shares was only Rs.
The High Court dismissed the Appeal filed by the Revenue vide the Impugned Order dated 26.02.2018, and affirmed the decision of the Tribunal on the ground that the issues raised before it, were urged on facts, and the lower appellate authorities had taken sufficient care to companysider the relevant circumstances.
40,00,000/ Ch.
9,744/ in return for A.Y. 2009 10 Warner A submission on 15.12.2011 Multimedia through dak was received Rs.
90,00,000 the companypany had applied for invested on 45,000 equity shares of Rs.
190/ each.
The matter was finally heard on 05.02.2019, when judgment was reserved.
90,00,000 However, they had number specified invested on how many shares, and at what 17.11.2008 premium they had purchased.
95,00,000 Iron and Steel Pvt.
The genuineness of the transaction was found to be companypletely doubtful.
244/2018 u S. 260A of the Act before the Delhi High Court to challenge the order of the Tribunal.
90,00,000 and Rs.
