NAMRATA MERCHANTS PVT. LTD.,,KOLKATA vs. DCIT, C.C. 3(2),, KOLKATA

The only issue raised by the assessee is against the confirmation of addition of ₹13,50,000/- by the ld. CIT (A) as made by the ld. AO u/s 68 of the Act in respect of unexplained share capital and share premium. The assessee has also challenged the confirmation of ₹6,750/- made by the ld. AO u/s 69C of the Act in respect of commission estimated at the rate of .5% on the share capital/ share premium.

The facts in brief are that the assessee filed the return of income on 26.09.2011, declaring nil income. Thereafter, the

In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO on the ground that the assessee has failed to establish the identity, capacity of the investors and thus, held that the assessee has failed to discharge its onus as cast

After hearing the rival contentions and perusing the materials available on record, I find that during the year the assessee has issued equity shares to three parties at a premium of ₹490. I note that during the assessment proceedings the assessee furnished before the ld. AO all the details qua the share subscribers comprising their PANs, names, addresses, Board resolutions, confirmations, bank statements, ITRs, audited financials, assessment order in one case etc. to prove the identity, creditworthiness of the parties and genuineness of the transactions. The ld. AO also issued notices u/s 131 of the Act to the subscribers though none appeared before the ld. AO but the investor companies filed all the details and evidences before the ld. AO confirming the investment having been made in the assessee company. The ld. AO made the addition on the ground that these companies were found to be non-existing on the addresses given and same was relied upon by the ld. CIT (A) to uphold the order of the ld. Assessing Officer. However, as a matter of fact the addresses on which the inspector went for verification were wrong and incorrect. Further, the replies to the summons u/s 131 of the Act satisfy all the conditions as to wrong addresses, as the parties have duly responded to the said summons. Under these circumstances, I am of the considered view that the assessee has discharged its onus by filing all the evidences before the ld. AO and the ld. CIT (A) and now burden shift to the revenue which is not discharged. Under these circumstances, the addition made by the ld. AO and as

Besides the AO has also estimated and added commission of ₹ 6,750/- on the said accommodation entries but this issue is consequential to the main issue decided by us and hence the AO is directed to delete the addition.

In the result, the appeal of the assessee is allowed.