5. Pr. CIT vs. NRA Iron and Steel Pvt. Ltd.
(2019) 412 ITR 161 (SC)
Cash credits – Where sums of money are credited as share
capital / premium: (1) The assessee is under a legal obligation to prove the
genuineness of the transaction, the identity of the creditors and
credit-worthiness of the investors who should have the financial capacity to
make the investment in question to the satisfaction of the AO, so as to discharge
the primary onus; (2) The assessing officer is duty-bound to investigate the
credit-worthiness of the creditor / subscriber, verify the identity of the
subscribers and ascertain whether the transaction is genuine, or whether these
are bogus entries of name-lenders, and (3) If the inquiries and investigations
reveal that the identity of the creditors is dubious or doubtful, or they lack
credit-worthiness, then the genuineness of the transaction would not be
established. In such a case, the assessee would not have discharged the primary
onus contemplated by section 68 of the Act.
The assessee had filed the
original return of income for the assessment year 2009-10 on 29.09.2009
declaring a total income of Rs. 7,01,870.
A notice was issued u/s. 148 of
the Act to re-open the assessment on 13.04.2012 for the reasons recorded
The assessee filed submissions
on 23.04.2012 to the notice u/s. 148, and objections on 30.04.2012. The
objections were rejected on 13.08.2012.
The assessee company in its
return showed that money aggregating to Rs. 17,60,00,000 had been received
through share capital / premium during the financial year 2009-10 from
companies located in Mumbai, Kolkata, and Guwahati. The shares had a face value
of Rs. 10 and were subscribed by the investor companies at a premium of Rs. 190
The assessee was called upon to
furnish details of the amounts received and provide evidence to establish the
identity of the investor companies, the credit-worthiness of the subscribers
and the genuineness of