In unabated 153A assessments, share capital/premium additions u/s 68 invalid without incriminating search material; assessee's proof of identity, creditworthiness, genuineness discharges onus, shifting burden to AO.

Order under section 254(1) of Income Tax Act

PER PAWAN SINGH, JUDICIAL MEMBER:

1. This appeal by the revenue is directed against the order of ld. Commissioner of Income Tax (Appeals)-3, Nagpur [for short “CIT(A)”] for assessment year 2010-11. The revenue has raised following grounds pf appeal;

“(i) On the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of Rs. 15.00 Crore made by the AD treating the share capital and share premium received by the assessee as unexplained cash credit u/s 68 of the IT. Act, without going into the merits of the case.

(ii) On the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of Rs. 15.00 Crore made by the AO treating the share capital and share premium received by the assessee as unexplained cash credit u/s 68 of the 1.T. Act, without appreciating the fact that incriminating documents were found from the residence of the director.

(iii) On the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of Rs. 15.00 Crore made by the AO treating the share capital and share premium received by the assessee as unexplained cash credit u/s 68 of the IT. Act without appreciating the fact that the assessee has failed to establish the creditworthiness of the creditors and the genuineness of the transactions to the satisfaction of the AO, thereby ignoring the Apex Court decision in the case Pavankumar M. Sanghvi Vs Income-tax officer (Special leave to appeal No(s) 10250 of 2018 and NRA Iron & Steel Pvt. Ltd (SLP (Civil) No. 29855 of 2018) dated 5" March, 2019 on same facts.

(iv) On the fact and circumstance of the case & in law, the Ld CIT(A) fails to appreciate that no prudent business-men will buy a share of face value of Rs.10 at Rs.90 premium and thereby selling again in the following year at Rs.10 to the assessee company suffering a loss of Rs 90?

(v) On the fact and circumstance of the case & in law, the Ld CIT(A) fails to appreciate that the seizure of blank share transfer forms given at the initial stage of investment along with the letter requesting for allotment of shares clarify the modus operandi of the assessee that he is the owner of shares and consequent investment in share capital and premium is his own.

(vi) On the fact and circumstance of the case & in law, the Ld CIT(A) erred in deleting the addition of Rs. 15.00 Crore being unexplained credit overlooking the crucial fact that the companies Warner Multimedia Ltd and Shyama Infosys Ltd, Unisys Software & Holdings Industries Ltd, Alka Diamond industries Ltd were used for providing accommodation entries in the form of bogus share capital/unsecured loan to various beneficiaries:

(vii) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate that the company from whom the share capital along with share premium was received did not have the creditworthiness to fund the share capital & premium and as such neither the creditworthiness nor the genuineness of the transaction is proved

(viii) On the fact and circumstance of the case & in law, the ld CIT(A) erred in deleting the addition of Rs.15,00,00,000/-being unexplained credit overlooking the deposition made by the operator who had accepted during the investigation made by investigating wing, Kolkata, that these beneficiaries’ com