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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,
Before: SHRI BHAVNESH SAINI, & SHRI N.K. BILLAIYA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER,
The above two captioned appeals by the assessee are preferred against two separate orders of the Commissioner of Income Tax [Appeals] - 35, New Delhi dated 27.03.2017 pertaining to Assessment Years 2009-10 and 10-11.
The quarrel is in respect of additions made u/s 68 of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short] amounting to Rs. 2.30 crores in A.Y 2009-10 and Rs. 5.15 crores in A.Y 2010-11 in respect of sums received from the shareholders as share capital and share premium.
Since it was agreed upon by the representatives of both the sides that the underlying facts and issues in AYs. 2009-10 and 2010-11 are identical, representatives of both the sides were heard at length on the facts of A.Y 2009-10 and on such concession, we have considered the facts in A.Y 2009-10.
Having heard the representatives of both the sides at length, the case records were carefully perused and with the assistance of the ld. Counsel, we have considered the relevant material evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules, 1962.
5. During the course of scrutiny assessment proceedings, from the details submitted by the assessee and material available with the department, the Assessing Officer found that during F.Y. 2008-09, the assessee has raised share capital money to the tune of Rs. 2.30 crores as follows:
Nominal Premium Sl. value of paid per Name and address of the No. of Dated of No . Company Shares share (Rs.) share (Rs.) allotment 1. M/s Topline Finvest Pvt. Ltd., 2,50,000 (Rs. 25,000l 47,50,000 30.03.2009 10 per share) (Rs. 190 per 2, Lal Bazar Street, share) 107C, Todi Chamber, 1st floor, Kolkata-700 001 2. M/s Spardan Vanijya 2,50,000 (Rs. 25,000 47,50,000 30.03.2009 Pvt. Ltd., 10 per share) (Rs. 190 per 9/12, Lai Bazar Street, share) Block E-, 4nd floor, Kolkata-700 001 3. M/s Midnight Agencies Pvt. Ltd., 25,000 2,50,000 (Rs. 47,50,000 30.03.2009 1, Raj Ballab Saha 10 per share) (Rs. 190 per Lane, Howarh -711101 share) 4. M/s Kokila Exports Pvt. Ltd., 28,50,000 15,000 1,50,000 (Rs 30.03.2009 9/12, Lai Bazar Street, 10 per share) (Rs. 190 per Block E-, 2nd floor, share) Kolkata-700 001
M/s Basukinath Vanijya 2,50,000 (Rs. 47,50,000 25,000 30.03.2009 Pvt. Ltd., (Rs. 190 per 10 per share) 9/12, Lai Bazar Street, share) Block E-, 4nd floor, Kolkata-700 001
Accordingly, a questionnaire dated 31.08.2012 was issued and the assessee was confronted with the result of investigation made by the department in respect of share capital.
In response to the aforementioned questionnaire, the assessee filed confirmations, bank statements, copies of ITRs, balance sheets etc. of the investor companies.
The Assessing Officer examined these documents but was not satisfied in as much as the assessee has filed copies of these companies’ ledger accounts appearing in the books of the assessee company duly confirmed by them whereas confirmations were required on the ledger account of the assessee in the books of the investor companies.
The Assessing Officer further analysed the returned income of the investor companies and found that the returned incomes were negligible to justify the amount paid by them towards purchase of shares in the appellant company.
A final show cause notice dated 31.01.2013 was served upon the assessee once again asking the assessee to justify the payment towards shares purchased by the five companies mentioned elsewhere. The detailed questionnaire is extracted by the Assessing Officer in the body of the assessment order.
The Assessing Officer further found that Shri Sampat Sharma has given a statement on oath on 28.09.2010 and the Assessing Officer was of the firm belief that in his statement, Shri Sharma had categorically admitted that he was not aware when the shares were purchased by the companies. The Assessing Officer further found that Shri Sharma had admitted that he was only a dummy director and knew nothing about the share transactions.
During the course of assessment proceedings, the Assessing Officer sent a letter to the ADIT, INV, UNIT III(3), Kolkata requesting him to send report to enable the Assessing Officer to complete the assessment. In its report, the INV Wing stated that most of the companies were found to be non-existent, therefore, further investigation did not bring any additional result and status of the report remains the same. The report further stated that these companies are jamakharchi companies of Kolkata, having no real business and formed for the purpose of providing accommodation entry in the form of share capital and unsecured loans mostly.
In the light of the aforestated notings/observations, the Assessing Officer made an addition of Rs. 2.30 crores in A.Y 2009-10 and Rs. 5.15 in A.Y 2010-11.
The findings of the Assessing Officer can be summarised as under:
i) Notices u/s 133(6) were not served. ii) Confirmations of all the parties were not received. iii) Companies were asked to attend the proceedings through their directors but all the directors did not attend the assessment proceedings. iv) Statement of Shri Sharma is adverse as being director of the company, he had no knowledge of the shares purchased by the investor companies.
We find that vide reply filed on 22.02.2013, the assessee has furnished confirmation of accounts, bank statements, income tax returns and audited balance sheet of the investor company, Memorandum and Articles of Association, list of directors and master data of the investor company as appearing the Registrar of Companies, Kolkata, share allotment advice, certified true copy of the Resolution of Investee Company passed by the board of directors of the company and copy of the resolution passed by the board of directors of investor company and copy of assessment orders of the investor company were also filed.
Vide reply dated 19.03.2013, the assessee once again filed all the documents requisitioned by the Assessing Officer. In the case of Finvest Pvt Limited, since on the earlier occasion, confirmation could not be filed, the assessee filed copy of the assessment order u/s 143(3) of the Act for A.Y 2006-07.
In so far as the share certificates are concerned, it was explained clearly that the appellant company had issued share certificates to all the share applicants and at present these companies were not their share holders/members as they have sold their shares. Since the assessee had no access to the share certificates, therefore, the same could not be filed.
Regarding producing the shareholder companies through their directors/authorised representatives for verification of genuineness of the investment, it was explained that two directors, namely Shri Sarat Agarwal and Shri Vinay Kumar Shah were produced for verification /examination. It was further brought to the notice of the Assessing Officer that the directors waited for long hours and whole day was spent in recording the statement of only one director, namely, Shri Ajit Kumar Singh and it was requested that exact date and time may be given to produce the investor companies through their directors/authorised representatives for verification of genuineness of investment in shares by them as the directors had to come all the way from Kolkata/Howrah,
All these relevant parts of the reply of the assessee are exhibited at pages 61 to 68 of the paper book.
It appears that the Assessing Officer was heavily influenced by the statement of Shri Sampat Sharma who admittedly accepted that he was only a dummy director and knew nothing about the share allotment to these companies. However, we find that the Assessing Officer did nothing to do to bring on record who is the ultimate beneficiary of these transactions. If Shri Sampat Sharma categorically admitted that he is a dummy director, nothing prevented the Assessing Officer to lift the corporate veil. Having failed to lift the corporate veil, we have to look at the transactions and not through the transactions.
Another adverse comment made by the Assessing Officer is in respect of returned income of the investor companies. In our considered opinion, substance over form should prevail. The returned income may be one of the factors, but it is not be all and and all. If the returned income is not sufficient to justify the credit worthiness of the share applicants, then the most important factor is to look at the net worth of the applicant.
The five applicant companies are namely,
The net worth of these companies are as under:
M/S BASUKINATH VANIJA (P) LTD i) Address : 1A, GRANT LANE, 1st FLOOR, Address : Address : Address : KOLKATA 700012 No. of shares : No. of shares : No. of shares : 25,000 No. of shares : PAN: PAN: AADCB2084K PAN: PAN:
Sr. No. Cheque No./ RTGS Date Amount (Rs) i) RTGS 30.03.2009 50,00,000 TOTAL 50,00,000 Return Filed on : 25.09.2009 Auditors of Company: Debabrata & Associates Net Worth of the company : As on As on As on As on As on As on As on As on Particulars Particulars Particulars Particulars 31.03.2009 31.03.2009 31.03.2009 31.03.2009 31.03.2008 31.03.2008 31.03.2008 31.03.2008 Shareholders Fund 53,86,200 42,82,200 Share capital _________ 10,09,29,025 Reserve & Surplus 7,99,52,678 Total Total Total Total 10,63,15,225 8,42,34,878 Application of Funds Current Assets Loans & advances Current Assets Loans Current Assets Loans Current Assets Loans advances advances advances 8,25,30,300 Stock of shares 7,85,85,000 4,23,164 Cash and bank balance 1,65,3549 54,43,063 Loans & Advances 2,20,50,007 Less: Current Liabilities & Provisions Less: Current Liabilities & Provisions Less: Current Liabilities & Provisions Less: Current Liabilities & Provisions Liabilities 4,500 1,03,500 5,545 Provisions 2,19,965 Total Total Total Total 10,045 10,045 10,045 10,045 3,23,465 Net Current Assets Net Current Assets Net Current Assets Net Current Assets 10,62,23,811 8,41,27,762 Miscellaneous expenditure to the extent not written i off or adjusted _____________________________________________ Deferred Revenue Expenditure 84,200 99,000 8,42,34,878 Total Total Total Total 10,63,15,225 10,63,15,225 10,63,15,225 10,63,15,225
115 115-116) 115 115 116) 116) 116)
M/S MIDNIGHT AGENCIES (P) LTD Address : 1, RAJA BALLAV SAHA LANE HOWRAH, WEST BENGAL 711101 No. of shares : 25,000 PAN: AABCM6864G
Sr. No. Cheque No./ RTGS Date Amount (Rs) 121780 13.08.2008 50,00,000 i) TOTAL 50,00,000 50,00,000 50,00,000 50,00,000 Return Filed on : 25.09.2009 Auditors of Company: Debabrata & Associates
Provisions As on As on Particulars 31.03.2009 31.03.2009 31.03.2009 31.03.2009 31.03.2008 31.03.2008 31.03.2008 31.03.2008 Shareholders Fund 1,77,50,000 1,13,17,500 Share capital 22,24,31,344 10,02,07,019 Reserve & Surplus Total 24,01,81,311 11,15,24,519 24,01,81,311 11,15,24,519 24,01,81,311 24,01,81,311 11,15,24,519 11,15,24,519 Application of Funds ..... Current Assets Loans & advances 22,37,17,500 9,21,51,370 Stock of shares 9,06,731 13,72,394 Cash and bank balance 1,07,30,909 1,67,95,281 Loans & Advances 48,00,000 12,00,000 Other Current Assets Less: Current Liabilities & Provisions 4,264 4,263 Liabilities Provisions 7,564 6763 Total 11,828 11,026 Net Current Assets 24,01,43,311 111508019 Deferred Revenue Expenditure 38,000 16500 Total 24,01,81,311 11524519 M/S SPANDAN VAN1JA (P) LTD Address : 9/12, LAL BAZAAR STREET? BLOCK – E,2nd FLOOR KOLKATA, WEST BENGAL 700001 No. of shares : 25,000 PAN: AAJCS5887K
Sr. No. Cheque No./ RTGS Date Amount (Rs) i) 121780 13.08.2008 50,00,000 TOTAL 50,00,000 Return Filed on : 25.09.2009 Auditors of Company: Manabendra Bhattacharyya & Co
Particulars As on As on 31.03.2009 31.03.2008 Shareholders Fund Share capital 85,02,500 16,55,000
Reserve & Surplus 16,05,26,756 3,04,24,383
Total 16,90,29,256 3,20,79,383 Application of Funds
Current Assets Loans & advances 1,61,47,000 14,43,57,000 Stock of shares 1,39,2625 49,280 Cash and bank balance 1,28,70,884 57,45,237 Loans & Advances Other Current Assets 10,70,0361 1,05,00,361 Less: Current Liabilities & Provisions 2,005 2,003 Liabilities 3,98,341 Provisions 3,98,709 4,00,714 4,00,344 Total 1,68,92,0156 3,20,41,533 Net Current Assets 31,200 1,03,400 Deferred Revenue Expenditure 6,650 Preliminary Expenses 5,700 16,90,29,256 3,20,79,383
M/S TOPLINE FINVEST (PI LTD Address : 107C TODI CHAMBER 2, LAL BAZAAR STREET, KOLKATA, WEST BENGAL 700001 No. of shares : 25,000 PAN: AAACT9954B Payments made Via
Sr. No. Cheque No./ RTGS Date Amount (Rs) 0 RTGS 30.03.2009 50,00,000 TOTAL 50,00,000 Return filed on 24.09.2009 Auditors of Company: Pawan Maun a & Co 50,00,000
As on As on Particulars 31.03.2009 31.03.2008 Shareholders Fund Share capital 2,29,31,000 1,60,93,500 Reserve & Surplus 22,78,93,579 9,79,58,325 Total 25,08,24,579 11,40,51,825 Application of Funds Current Assets Loans & advances Stock of shares 21,61,06,516 8,92,31,400 Cash and bank balance 19,35,218 1220148 Loans & Advances 1,95,87,189 2,08,98,545 Other Current Assets 1,31,70,875 27,00,000 Less: Current Liabilities & Provisions Liabilities 2,021 2,020 Provisions 7,998 7,548 Total 10,019 9,568 Net Current Assets 25,07,89,779 11,40,40,525 Deferred Revenue Expenditure 34,800 11,300 Total 25,08,24,579 11,40,51,825 MTSlCOKILA EXPORTS PRIVATE LIMITED Address : 9/12, LAL BAZAAR STREET, KOLKATA, WEST BENGAL 700001 No. of shares : 15,000 PAN: AABCK1178G Payments made Via Sr. No. Cheque No./ RTGS Date Amount (Rs) i) 129093 16.06.2008 30,00,000 TOTAL 30,00,000
A perusal of the aforementioned statements giving total net worth of share applicant companies speaks for their credit worthiness.
In so far as Kokila Exports is concerned, its director Shri Ajay Kumar Singh appeared before the Assessing Officer who examined him but did not put any question towards net worth of the company nor asked the director to furnish its financial details. Once the company was represented through its directors, it was incumbent upon the Assessing Officer to specify his queries and the assessee cannot be held responsible once he has established the source.
In our considered opinion, whether the assessee has discharged the initial burden cast upon him by provisions of section 68 of the Act or not, is purely a question of fact and the facts on record, as discussed hereinabove, clearly demonstrate that the assessee has prima facie discharged the initial onus cast upon it by provisions of section 68 of the Act.
As mentioned elsewhere, the Assessing Officer has observed that these share applicant companies are non-existent and this observation was based upon the report of the INV Wing, Kolkata. We fail to understand that if these share applicant companies were non-existent, then how come they were assessed to Income tax, which is evident from their assessment orders placed in the paper book.
It would be pertinent to mention here that the applicant’s premises were searched and not a single document was found during the course of search proceedings which could suggest that the assessee has purchased cheques by way of cash from these share applicant companies. Each of the shareholders from whom share capital was raised/received are duly identifiable corporate entities and assessed to tax as well. The entire share capital has been subscribed through banking channels and there was no material found during the search which proves that the money came from the coffers of the appellant company. Financial statements of each share holder company exceeds its net worth, thereby establishing the credit worthiness of the share applicant companies to make investment in shares of the applicant company. Further, each share holder has independently confirmed their investment in response to notices u/s 133(6) of the Act.
In our considered opinion, suspicion can be no basis to make addition. Moreover, the Revenue in the case of shareholder companies has accepted their independent identity, source of income and carrying on business of investments and disinvestments. Therefore, the ratio laid down by the Hon'ble Supreme Court in the case of Lovely Exports Pvt Ltd 319 ITR 5 squarely applies on the facts of the case in hand. In fact, in the case of Stellar Investments Ltd 251 ITR 263 wherein the decision of the Hon'ble High Court of Delhi in 192 ITR 287 was upheld wherein it was held that in the case of a company, even if the subscribers to the share capital are not genuine, then too, it would not be regarded as undisclosed income of the assessee company.
The ld. DR placed heavy reliance on the decision in the case of NRA Iron and Steel 103 Taxmann.com 48 wherein the Hon'ble Supreme Court has reversed the order of the lower authorities holding that where there was failure on the part of the assessee to establish credit worthiness of investor companies, then merely because the assessee company had filed all the primary evidences, it would not suffice and the onus upon the assessee is not discharged
We have explained the facts of the case in hand and have also extracted the net worth of the share applicant companies. Therefore, the facts of the case in hand are clearly distinguishable from the facts of the case in NRA Iron and Steel [supra] in as much as in that case, the assessee failed to explain the net worth of share applicants.
Similarly, the facts of NDR Promoters Pvt Ltd [2019]-TIOL—172- High Court-DEL-IT, Prem Castings [P] Ltd 88 Taxmann.com 189 and Navodaya Castle P. Ltd 367 ITR 306 are clearly distinguishable from the facts of the case in hand as explained elsewhere.
In the case of Navodaya Castle [supra], the assessee was unable to produce the directors and principal officers of the share holder companies and there were adverse remarks in respect of the bank account, which raised doubt on the identity and credit worthiness of the share holders. As mentioned elsewhere, the assessee did produce some directors of the share applicant companies but the Assessing Officer could record statement of only one director. Thereafter, the Assessing Officer did not ask the assessee nor forced the attendance of the directors of the share applicant companies and there are no adverse findings in so far as the bank accounts are concerned.
Similarly, in the case of NR Portfolio Pvt Ltd 42 Taxmann.com 339, the Hon'ble High Court of Delhi observed that if the Assessing Officer doubts the documents produced by the assessee, the onus shifts on the assessee to further substantiate the facts. In the case in hand, the assessee did file net worth of all the share applicant companies and further corroborated the share transactions with master data filed with Registrar of Companies.
The other decisions relied upon by the ld. DR are also distinguishable on facts of the case in hand.
As mentioned at the beginning that the underlying facts in issues in A.Y 2010-11 are identical to those of A.Y 2009-10, for the sake of completeness we will extract the networth of share applicant companies for A.Y 2010-11 as under:
Name and address of the No. of Nominal value Premium paid Dated of SI. Company Shares of share (Rs.) per share (Rs.) allotment No. M/s Kokila Exports Pvt. 1. 12,500 30.03.2009 1,25,000 (Rs. 23,75,000 (Rs. Ltd., 10 per share) 190 per share) 9/12, Lai Bazar Street, Block E-, 2nd floor, Kolkata-700 001 M/s Abhilasha Exports 2. 25,000 30.03.2009 2,50,000 (Rs. 47,50,000 (Rs. Pvt. Ltd., 10 per share) 190 per share) Saklat Palace, Kolkata-72 M/s Ambika Vimcom 3. 10,000 30.03.2009 19,00,000 (Rs. 1,00,000 (Rs. Pvt. Ltd., 190 per share) 10 per share) 1, Mahindra Nath Roy Bye Lane, Howrah-711101 M/s Deesha Tie Up Pvt. 4. 15,000 30.03.2009 1,50,000 (Rs. 28,50,000 (Rs. Ltd., 10 per share) 190 per share) 1, Raj Ballab Saha Lane, Howarh - 711.101 M/s Madam Agencies 5. 25,000 30.03.2009 2,50,000 (Rs. 47,50,000 (Rs. Pvt. Ltd., 10 per share) 190 per share) 9/12, Lai Bazar Street, Block E-, 2nd floor, Kolkata-700 001 M/s Puspadant 6. 50,000 5,00,000 (Rs. 95,00,000 (Rs. Infrastructure Ltd., 10 per share) 190 per share) 52, Weston Street, 4th floor, Kolkata-13
M/s Pushpanjali 7. 25,000 2,50,000 (Rs. 47,50,000 (Rs. Commotrade Pvt. Ltd., 10 per share) 190 per share) 3, Saklat Palace, Kolkata-72 M/s Ranisati Stockist Pvt. 8, 12,500 1,25,000 (Rs. 23,75,000 (Rs. Ltd., 10 per share) 190 per share) 1A, Grand Lane, 1st floor, Kolkata-700 012 M/s Sahej Tie Up Pvt. 9. 10,000 1,00,000 (Rs. 19,00,000 (Rs Ltd., 9/12, Lai Bazar 10 per share) 190 per share) Street, Block E-, 2nd floor, Kolkata-700 001 10. M/s Sankat Mojchan 12,500 1,25,000 (Rs. 23,75,000 (Rs. Vinimay Pvt. Ltd., 10 per share) 190 per share) 9/12, Lai Bazar Street, Block E-, 2nd floor, Kolkata-700 001 11. M/s Shree Sudarshan 25,000 2,50,000 (Rs. 47,50,000 (Rs. Casting Pvt. Ltd., 10 per share) 190 per share) 9/12, Lai Bazar Street, Block E-, 2nd floor, Kolkata-700 001 12. M/s Skylight Distributors 25,000 2,50,000 (Rs. 47,50,000 (Rs. Pvt. Ltd., 10 per share) 190 per share) 3, Saklat Palace, Kolkata- 700 072 13. M/s Tarakeshwar 10,000 1,00,000 (Rs. 19,00,000 (Rs. Commercial Pvt. Ltd., 10 per share) 190 per share) 9/12, Lai Bazar Street, Block E-, 2nd floor, Kolkata-700 001
M/s RANISATI STOCKISTS PR 1 Sr. Sr. Sr. Sr. Name of Entities Name of Entities Name of Entities Name of Entities IVATE LIMITED Amount Amount Amount Amount No. No. No. No. Address: 1A, Grant Lane Kolkat-72 No. of Shares: 12,500 PAN No. (Rs (Rs-) (Rs (Rs AAECR1291D Payments made Via 25,00,000 25,00,000 25,00,000 25,00,000 Sr. No. Cheque No./ RTGS Date Amount (Rs) i) 893862 23.09.2009 25,00,000 TOTAL 25,00,000 Bank Name: Syndicate Bank Ward: ITO WD 39(3)/WBG/W/139/3 Return filed on: 17.09.2010 Auditors of the Company: Pawan Maurya & Co.
PARTICULARS As on 31.03.2010 As on 31.03.2009 Shareholders Fund Share capital 57,60,000 57,60,000 10,75,40,000 10,75,40,000 Total 11,33,00,000 11,33,00,000 Application of Funds Current Assets Loans & advances Stock of shares 9,98,50,000 11,30,00,000 Cash and bank balance 1,84,461 1,80,531.66 - Loans & Advances 1,60,25,554 - Other Current Assets 1,00,000
29,54,835.77 1,000 Less: Current Liabilities & Provisions 11,32,05,179.23 11,31,79,531.66 Net Current Assets Preliminary Expenditure
5,320.20 7,093.60 To the extent not written off or adjusted Deferred Revenue Expenditure 65,400 87,200 Profit & Loss Account 24,100.57 26,174.74 Total 11,33,00,000 11,33,00,000
M S SAHAJ TIE UP PRIVATE LIMITED Address: D/12, Lai Bazar Street, Block E, 2nd Floor Kolkata-700001 No of Shares: 10,000 PAN No. AAECR1291D Pavments made Via
Sr. No. Cheque No./ RTGS Date Amount (Rs) i) RTGS 05.09.2009 20,00,000 TOTAL 20,00,000 Bank Name: Axis Bank Auditors of the Company: Agrawal Singhania & Co.
As on As on PARTICULARS 31.03.2010 31.03.2009 Shareholders Fund Share capital 1,38,15,000 1,38,15,000 Reserve & Surplus 23,25,53,263 23,25,53,263 Total 24,63,68,263 24,63,68,263 Application of Funds Investment - 24,03,00,000 Current Assets Loans & advances Stock of shares 21,96,50,000 Cash and bank balance 41,65,522 12,64,145
Loans & Advances 13,64,702 1,94,74,476 Other Current Assets 1688804 1,58,93,117 Less: Current Liabilities & Provisions 1201899 99,81,815 Net Current Assets Preliminary Expenditure Deferred Revenue Expenditure 30,000 51998 Profit & Loss Account 21,135.54 16,342 Total 24,63,68,263 24,63,68,263 MS SANK AT MQCHAN VINIMAY PRIVATE LIMITED Address: 9/12, Lal Bazar Street, Block E 4th Floor, Kolkata No. of Shares: 12,500 PAN No. AAECR1291D
Sr. No. Cheque No./ RTGS Date Amount (Rs) i) 894016 23.09.2009 25,00,000 TOTAL 25,00,000 Auditors of the Company: H.K. Saha & Co.
As on As on PARTICULARS 31.03.2010 31.03.2009 Shareholders Fund Share capital 41,55,000 41,55,000 Reserve & Surplus 77,045,000 77,045,000
As on As on PARTICULARS 31.03.2010 31.03.2009 Shareholders Fund Share capital 41,55,000 41,55,000 Reserve & Surplus 77,045,000 77,045,000
Total 8,12,00,000 8,12,00,000 Application of Funds Current Assets Loans & advances Stock of shares 6,85,72,600 9,65,10,000 Cash and bank balance 279,188.23 1,00,039.66 - Loans & Advances 1,17,71,297 - Other Current Assets 5,00,000 Less: Current Liabilities & Provisions 3,073 1,55,12,000 Net Current Assets 8,11,20,012.23 8,10,98,039.66 Preliminarv Expenditure
To the extent not written off or adjusted 5,320.20 7,093.60 Deferred Revenue Expenditure 53,400 71,200 Profit & Loss Account 21,267.57 23,666.74 Total 8,12,00,000 8,12,00,000 M/s Skylight Distributors Pvt Ltd Address 9/12, Lal Bazar Street, Block E 4th Floor, Kolkata No. of Shares: 12,500 PAN No. AAECR1291D Payments made Via Bank Name: Syndicate Bank Ward: ITO Ward 1(4)
Sr. No. Cheque No./ RTGS Date Amount (Rs) i) 197440 04.03.2010 50,00,000 TOTAL 50,00,000
Net Worth of the Company As on PARTICULARS 31.03.2010 As on 31.03.2009 Shareholders Fund Share capital 1,54,44,290 41,00,000 Reserve & Surplus 48,51,15,879 15,60,00,000 Total 50,05,60,169 16,01,00,000 Application of Funds Current Assets Loans & advances Stock of shares 40,53,48,000 14,00,00,000 - Cash and bank balance 3,07,03,679 Loans & Advances 65,552 2,00,93,380 - Other Current Assets 6,44,27,648 Less: Current Liabilities & Provisions 1,32,920 87,001 Net Current Assets 50,04,11,959 16,00,06,379 Miscellaneous Expenditure Preliminary Expenses 1,48,210 93,330 - Profit & Loss Account 291 Total 50,05,60,169 16,01,00,000 M/S TARKESHWAR COMMERCIAL PRIVATE LIMITED Address: 9/12, Lai Bazar Street, E Block, 4th Floor, Kolkata- 700001 No. of Shares: 10,000 PAN No. AADCT0358A Payments made Via Sr. No. Cheque No./ RTGS Date Amount (Rs) i) 894086 24.09.2009 2,000,000 Bank Name: Syndicate Bank Auditors of the Company: Pawan Maurya & Co.
Net Worth of the Company As on PARTICULARS As on 31.03.2010 31.03.2009 Shareholders Fund 5,810,000 5,810,000 Share capital 108,490,000 108,490,000 Reserve & Surplus Total 114,300,000 114,300,000 Application of Funds Current Assets Loans & advances 90,470,000 101,000,000 Stock of Shares 277,900.36 180,526 Cash & Bank Balance 16,412,027 13,000,000 Loans & Advances 7,950,000 Other Current Assets Total 115,109,927.36 114,180,526 Less: Current Liabilities & Provisions 902,000 1,000 Liabilities - 1,492 Provision Total 903,492 1,000 Net Current Assets 114,206,435.36 114,179,526 Preliminary Expenditure (To the extent not written off or adjusted) 5,320.20 7,093.60 Deferred Revenue Expenditure 65,400 87,200' Profit & Loss 22,844.44 26,180.40 Total 114,300,000 114,300,000 M/S ABH1LASHA EXPORTS PRIVATE LIMITED Address: 95A C R Avenue, Kolkata, West Bengal 700073 No. of Shares: 25,000 PAN No. AAHCA5909J
Sr. No. Cheque No./ RTGS Date Amount (Rs) i) 894086 24.09.2009 50,00,000 TOTAL 50,00,000
As on As on PARTICULARS 31.03.2010 31.03.2009 Shareholders Fund Share capital 3626,460 100,000 Reserve & Surplus 172,956,542.15 Total 176,583,002.15 100,000 Application of Funds
Current Assets Loans & advances - Stock-in-Trade 124,650,000 - Sundry Debtors 1,104,666 Cash & Bank Balances 10,106,506.65 81,437 - Loans & Advances 41,210,007 Total 177,071,179.65 81,437 Less: Current Liabilities & Provisions Net Current Assets 559,937.50 501 176,511,242.15 80,936 Miscellaneous Expenditure (To the extent not written off or adjusted) Preliminary Expenditure 71,760 15,930 Profit & Loss - 3,134 Total 176,583,002.15 100,000 M/S AMBIKA VINCOM PRIVATE LIMITED Address: 1, Mahendra Nath Roy Bye Lane, Howrah, West Bengal - 711101 No. of Shares: 10,000 PAN No. AAHCA3091P
Sr. No. Cheque No./RTGS Date Amount (Rs) i) 894086 24.09.2009 20,00,000 TOTAL 20,00,000 Bank Name: Syndicate Bank Auditors of the Company: Pawan Maurya & Co.
As on PARTICULARS 31.03.2010 As on 31.03.2009 Shareholders Fund Share capital 8,760,000 8,760,000 Reserve & Surplus 164,547,063.02 164,540,698.64 173,307,063.02 Total ' 173,300,698.60 Application of Funds Current Assets Loans & advances Stock of shares 140,460,000 159,900,000 Cash & Bank Balances 221,920.82 157,866 Loans & Advances 32,541,982 13,127,021 Total 173,223,902.82 173,184,887 Less: Current Liabilities & Provisions Liability 2,000 1,000 Provision 3,560 1,482 Total 5,560 2,482
Net Current Assets 173,218,342.82 173,182,405 Preliminary Expenditure (To the extent not written off or adjusted) 5,320.20 7,093.60 Deferred Revenue Expenditure 83400 111200
173,307,063.02 173,307,063.02 Total M/s Deesha Tie Pvt Ltd Address: 1, Raj Ballav Saha Lane, Howrah, West Bengal - 711101 No. of Shares: 15000 PAN No. AABCD7985M Sr. No. Cheque No./RTGS Date Amount (Rs) i) 894086 05.09.2009 30,00,000 TOTAL 30,00,000 Bank Name:Axis Bank Auditors of the Company: Agrawal Singhania & Co.
As on PARTICULARS 31.03.2010 As on 31.03.2009 Shareholders Fund Share capital 24,908,500 24,908,500 Reserve & Surplus 443,501,525.39 443,496,297.59 Total 468,410,025.39 468,404,797.59 Application of Funds Current Assets Loans & advances Stock of shares 444,282,971.97 442,261,455 Cash & Bank Balances 346,431.92 892,722.41 Loans & Advances 10,578,339 20,804,524
468,807,742.89 473,458,701.41 Total Current Liabilities & Provisions Liability 502,264.50 5,190,691.82 6,453 11,212 Provision 508,717.50 5,190,691.82 Total 468,256,797.59 Net Current Assets 468,299,025.39 Miscellaneous Expenditure (To the extent not written off or adjusted) _________________________ 148,000 111,000 Deferred Revenue Expenditure 468,410,025.39 468,404,797.59 Total
M/S PUSHPADANT INFRASTRUCTURE LIMITED Address: 10A, Hospital Street, 2nd Floor, Room No. 205, Kolkata, West Bengal 700072 No. of Shares: 50000 PAN No. AAFCP1441G Sr. No. Cheque No./ RTGS Date Amount (Rs) 190442 25.02.2010 50,00,000 i) 09.03.2010 50,00,000 ii) TOTAL 100,00,000
Bank Name: Axis Bank Auditors of the Company: S. Sadhu & Assciates Net Worth of the Company
PARTICULARS Shareholders Fund 15,500,000 Share capital 735,347,864.15 Reserve & Surplus 750,847,864.15 Total Application of Funds Current Assets Loans & advances Stock-in-trade 654,810,000 36,594,799 Sundry Debtors 21,964,900.15 Cash & Bank Balances 191,811,281 Loans & Advances 905,180,980.15 Total Less: Current Liabilities & 154,499,796 Provisions 750,681,184.15 Net Current Assets Miscellaneous Expenditure (To the extent not written off or adjusted) ______________________ Preliminary Expenses 166,680 Profit & Loss Account 750,847,864.15 Total
M/S PUSHPANJALI COMMQ TRADE PRIVATE LIMITED Address: 3 Saklat Place, Kolkata, West Bengal 700072 No. of Shares: 25000 PAN No. AAECP9727C
Cheque Sr. No. No./RTGS Date Amount (Rs) i) 198364 09.03.2010 50,00,000 TOTAL 50,00,000
Shareholders Fund 10,100,000 100,000 Share capital 490,095,030 Reserve & Surplus Total 500,195,030 Application of Funds Current Assets Loans & advances Stock-in-trade 419,862,600 14,911,033 Sundry Debtors Cash & Bank Balances 9,886,846.50 81,414 Loans & Advances 61,266,165.50 Total 505,926,645 81,414 Less: Current Liabilities & Provisions 5,874,025 501 Net Current Assets 500,052,620 80,913 Miscellaneous Expenditure (To the extent not written off or adjusted) ______ _______________ Preliminary Expenses 142,410 15,930 Profit & Loss Account 3,157 Total 500,195,030 100,000
Bank Name: Axis Bank Auditors of the Company: H.K. Saha & Co. Net Worth of the Company
11 M/S KQKILA EXPORTS (PI LTD Address: 9/12, Lai Bazar Street, Block-E, 2nd Floor, Kolkata^00001 No. of Shares: 12500 PAN No. AABCK1178K Cheque No./ Sr. No. RTGS Date Amount (Rs) i) 17.04.2009 25,00,000 TOTAL 25,00,000
M/S MADSAN AGENCIES (P) LTD Address: 12 nd Floor, Kolkata - 700001 9/12, Lai Bazar Street, Block-E, 2 No. of Shares: 25000 PAN No. AACCM059K
Cheque No./ Sr. No. Date Amount (Rs) RTGS i) 08.07.2009 50,00,000 TOTAL 50,00,000
M/S SLDHARSHAN CASTING tPl LTD Address: 9/12, Lai Bazar Street, Block-E, 2nd Floor, Kolkata – 70000 No. of Shares: 25000 PAN No. AADCS9429B Cheque No./ Sr. No. RTGS Date Amount (Rs) i) 08.07.2009 50,00,000
TOTAL 50,00,000
It can be seen from the aforementioned net worth of the share applicant companies, only net worth of three companies is not available, namely, Kokila Exports, M/s Madsan Agencies P. Ltd and M/s Sudharshan Casting [P] Ltd. However, we find that the directors of these companies, namely, Shri Ajit Singh for Kokila Exports and Shri Vinay Kumar Shah for Madsan Agencies and Sudharshan Casting appeared before the directors incompliance to summons u/s 131 of the Act. We are of the considered view that the assessee has prima facie discharged the initial onus cast upon it successfully.
Considering the facts of the case as explained hereinabove, we are of the considered opinion that the assessee has successfully discharged the initial onus cast upon it by provisions of section 68 of the Act.
In the result, both the appeals filed by the assessee in ITA Nos.
3333 & 3334/DEL/2017 are allowed.
The order is pronounced in the open court on 15.01.2020.