PMI ENTERTAINMENT (I) P.LTD,MUMBAI vs. ITO 16(1)(3), MUMBAI

The next issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the Assessing Officer in making addition of total share premium of ₹1,86,84,000/- out of which the share premium of 1,40,21,079 along with share application money of ₹13,54,690/- aggregating to ₹1,53,75,769/- collected during the financial year 2007-08 relevant to Assessment Year 2008-09. For this, assessee also stated that substantial evidences were produced but CIT(A) has not accepted. For this, assessee has raised the following ground Nos.2 to 5 as under:-

“2. On the facts and circumstances of the case and in law, learned AO ought to have appreciated that provisions of Sec. 68 would apply only to the receipts credited during the relevant previous year. Learned AO erred in not appreciating that out of the total share premium of Rs. 1,86,84,000/-, Rs. 1,40,21,079/- share premium together with share application money Rs.13,54,690/- aggregating Rs 1,53,75,769/- was collected and accounted during the preceding previous year relevant to assessment year 2008-09 and therefore cannot attract provisions of Sec. 68 in the assessment of previous year relevant to assessment year 2009- 10.

Before us, the assessee contended that the substantial evidences were produced and as per balance sheet also the fact is that the share application money along with share premium amounting to ₹1,53,75,769/- was received prior to 31.03.2008 and remaining only “7.2 Having considered the rival submissions and perused the relevant material on record filed by the Appellant, I am of the view that the Appellant has not given adequate documentary evidence with regard to the identity of Shri I Gunawan Sulaiman, the genuineness of the transaction and above all the creditworthiness of the creditor. The sources of income of the creditor have not been

Hence, he confirmed the entire addition vide Para 7.2.4 as under: - “7.2.4 In view of the foregoing discussion and binding precedents, I am of the view that the Assessing Officer was justified in making an addition of ₹1,86,85,000 as un-explained credit under section 68 of the Act, the having failed to prove the identity of the creditor, genuineness of the transaction and above all the creditworthiness of the creditor in a transparent matter with the help of proper documents and the also having failed to offer any justification for a very high chare premium.”