1. The present appeal is filed by the Revenue against the order dated 08/04/2022 passed by the ld. Commissioner of Income Tax (Appeals) - 48, Mumbai [in short, 'the Ld. CIT(A)'] for A.Y. 2008-09.

2. The grounds of appeal raised by the Revenue are reproduced as under:

1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A), is justified in deleting the addition of Rs. 1,99,75,000/- made ws 68 of the Income Tax Act, as unexplained credit on accounts of sum credited in the books of accounts of the assessee who received share capital and share premium from Javcee Pvt. Lid, without appreciating the fact that the entity did not have required creditworthiness.

3. Briefly, the facts of the case are that the assessee company had filed its return of income on 31.03.2006 declaring total income of Rs. 2,84,220/- for the year under consideration. The return was processed u/s. 143(1) of the Income Tax Act, 1961 [in short, " the"]. Later, the case of the assessee was reopened u/s. 147 of the and notice u/s. 148 of the was issued on 30.03.2015. In response to the same, the assessee filed a letter dated 27.04.2015 requesting to treat the original return of income filed for A.Y. 2008-09 as that filed u/s. 148 of the. Copy of the reasons recorded for reopening the assessment was supplied to the assessee and objections filed by the assessee were also disposed off by a speaking order dated 15.02.2016. Thereafter, statutory notice u/s. 143(2) was also issued to the assessee on 12.06.2015. In the reassessment completed, the Assessing Officer made addition of Rs. 3,13,35,000/- being share capital and share premium received from eight parties u/s. 68 of the. Aggrieved by the addition made, the assessee preferred appeal before the ld. CIT(A) who deleted the addition of Rs. 3,13,35,000/- on the premise that the tests prescribed u/s. 68 of the are satisfied by the assessee. Being aggrieved by the order passed by the ld. CIT(A), the Revenue is in appeal.

4. The ground of appeal of the Revenue relates to the deletion of the addition of Rs. 1,99,75,000/- made u/s. 68 of the as unexplained cash credit on account of sum credited in the books of accounts of the assessee who received share capital and share premium from Jaycee Pvt. Ltd. without appreciating the fact that the said entity did not have required creditworthiness.

5. Briefly, the facts qua the issue related to the share capital and premium received from M/s. Jaycee Pvt. Ltd. are that the assessee had received share application money of Rs. 1,99,75,000/- from the said party in A.Y. 2007-08. The assessee had submitted complete cheque wise details along with the bank statements of appellant company. The case of the assessee was selected for scrutiny u/s. 143(3) for A.Y. 2007-08 i.e. the year of receipt/transfer of share application money wherein the assessee had submitted the relevant details in this regard before the Assessing Officer which was verified and accepted by the then Assessing Officer. Even the party namely M/s. Jaycee Industries Ltd. was summoned to which response was also made. During the course of reassessment proceedings for the year under consideration also, notice u/s. 133(6) of the was issued to the said party. In response the said party confirmed the investments being made in the assessee company on premium. However, the Assessing Officer doubted its creditworthiness based on the analysis of its financials and accordingly, made the addition u/s. 68 of the. However, the ld. CIT(A) deleted the said addition.

6. The ld. Departmental Representative appearing for the revenue argued that action of the Assessing Officer in making the addition u/s. 68 of the in respect of the party namely M/s. Jaycee Industries Ltd. be upheld as it has no creditworthiness at all. He drew our attention to the financials of the said company and pointed out that it has carried minimal business despite huge capital/share premium, it has earned minimal interest income only and even the bank statement has not been filed. He therefore vehemently submitted that since the creditworthiness of the share applicant itself is not proved, the assessee has not discharged its onus casted u/s.68 of the and hence, the addition of Rs. 1,99,75,000/- be confirmed.

6.1. In rebuttal, the ld. Counsel of the assessee explained that the amount of share application money amounting to Rs. 1,99,75,000/- was received from M/s. Jaycee Industries Ltd. in F.Y. 2006-07 relevant to A.Y. 2007-08 and complete scrutiny u/s. 143(3) was also carried out in respect of the receipt of the said funds by the then Assessing Officer and no adverse inference was drawn. Further, even in the present reassessment proceedings, the said party had duly responded to the notice u/s. 133(6) of the confirming the transaction done with the assessee company. In the year under consideration, the assessee has only allotted shares to the said party and no fresh amount is received from the said party and accordingly, no addition can be made u/s. 68 of the.

7. We have heard the rival contentions of the parties and perused the material on record. The issue to be decided is whether the addition u/s. 68 of the can be made when the assessee has not received any amount from the alleged party in the year under consideration. In this regard, we agree with the findings of the ld. CIT(A), the relevant extract of which is reproduced below:

"10.9 As far as Share Application Money of Rs. 1,99,75,000/- from M/Jaycee Industries Limited is concerned, it is explained that the appellant had allotted 850. equity shares to Jaycee Industries Limited and received amounts aggregating to Rs. 1,99,75,000 towards the same. M/s. Jaycee Industries had applied for equity shares in the FY 2006-2007. Complete cheque wise details along with bank statements of Appellant Company were duly submitted to the Learned AO.

10.10 Appellant Company's return was processed under scrutiny assessment W/s. 14363) for the Assessment Year 2007 - 2008, i.e., year of receipt/transfer of share application money. The Appellant had duly submitted all the details before the AO, which was verified and accepted by then AO. Moreover, Jaycee Industries also responded to summons issued by the Learned AO.

10.11. In my considered view, once it is established that the amount towards share allotment were received in earlier assessment years and only allotment has been made in the Assessment Year under consideration, there is no question of any addition u/s. 68 in the impugned AY. 2008-09. Hence, additions related to share monies and share premium, which were received in the form of loans in earlier assessment years i.e., in the cases of M/s. Bandana Sangeet Paper Private Limited, M/s. Bishnauth Tea Company Limited, M/s. Bismarak Exim Private Limited, M/s. Mahacol Trexim Private Limited, M/s. Brijdham Developers Private Limited, M/s. Kilburn Engineering and M/s. Naviplast commerce P. Ltd. will not survive.

10.12 As far as addition in respect of M/s. Jaycee Industries Limited, I find that M/s. Jaycee Industries Limited has replied to the notice of the AO. The AO has not given any reason for non-acceptance of details provided by the said company or detailed submissions made by the AO in the assessment proceedings. Once identity, creditworthiness and genuineness of transactions with M/s. Jaycee Industries Limited are established, the onus shifts on the AO and he is required to make specific findings as to why share monies received from the said company should be treated as non-genuine. There is no specific finding related M/s. Jaycee Industries. I find that similar situation exists for seven companies mentioned above. Considering the totality of the facts and circumstance, in my considered view, entire addition of Rs. 3,13,35,000/- under section 68 of the IT. Act will not survive as per the tests prescribed by various judicial authorities and deserved to be deleted. Hence, grounds of appeal no. 2 and 3 are Allowed."

7.1. Once the amount is not received in the year under consideration, there cannot be any sum found credited in the year under consideration as required for the purpose of section 68 of the. Hence, the addition made by the Assessing Officer u/s. 68 of the in respect of M/s. Jaycee Industries Ltd. deserves to be deleted and accordingly, the ground of appeal of the revenue is dismissed.

8. In the result, the appeal of the Revenue is dismissed.