TaxTMI 
TaxTMI 
2009 (12) TMI 713
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....apital and Rs. 66,64,500 under the head "Share premium account". The assessee submitted that it has received an amount of Rs. 74,05,000 (being the total of share capital and share premium) being issue of 74,050 equity shares of Rs. 10 each at a premium of Rs. 90 to nine companies. The names and addresses were provided by the assessee. To find out the identity, creditworthiness and genuineness of the amount received, letters were issued under section 133(6) of the Act calling for requisite information. Most of the letters were not served and were received back with the postal remark "no such party" and for some the reply was not received. Therefore, the Assessing Officer intimated the position to the assessee by letter dated March 12, 2007, ....
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....in this case the assessee has failed to discharge : (1) CIT v. W. J. Walker and Co. [1979] 117 ITR 690, 694 (Cal) ; (2) Sajan Dass and Sons v. CIT [2003] 264 ITR 435 (Delhi) ; (3) Sumati Dayal v. CIT [1995] 214 ITR 801 (SC) ; and (4) Jaspal Singh v. CIT [2006] 290 ITR 306 (P&H). The assessee preferred appeal before the Commissioner (Appeals). The Commissioner (Appeals) provided various opportunities to the appellant to appear. The notices issued by the Commissioner (Appeals) were returned with the remark by the postal authorities "no such person". The Commissioner (Appeals) therefore, decided the appeal on the merits. The learned held as under : "The appellant was provided various opportunities to substantiate this ground of appeal wi....
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....d this ground is treated as dismissed." Learned counsel for the assessee Shri Ashwani Taneja submitted that the assessee filed confirmation letters. The Assessing Officer was not satisfied because the bank statements were not submitted. Once again the assessee filed confirmation letters. These confirmations, inter alia, included certificates of incorporation of the respective companies, proof of permanent account number, proof of filing income-tax return, copies of bank statement, copies of share certificates issued by the company and other records relating to existence of the companies. In such a situation the onus has been discharged. In similar circumstances, the Delhi Bench of the Tribunal in the case of ITO v. Jai Mata Bhawani Oversea....
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....ted company. Since the existence itself has not been proved, leave apart creditworthiness of the share applicants and genuineness of transaction. The Full Bench of the Delhi High Court in the case of CIT v. Sophia Finance Ltd. [1994] 205 ITR 98 held that the provision of section 68 shall equally apply even in respect of cash credit stated to be by way of share capital. Therefore, the assessee is not merely required to prove the identity of the shareholders but also the creditworthiness of the creditors and genuineness of the transaction. The observation of the hon'ble Supreme Court in the case of CIT v. Lovely Exports P. Ltd. [2009] 319 ITR (St.) 5 ; 216 CTR 195, is only at the time of deciding the special leave petition but not during ....
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.... the visit by the Inspector, both were confronted to the assessee. Accordingly the basic identity of the respective share applicants itself is not proved. The identity of a person is not proved on paper. The record available with the Registrar of Companies is as filed by some persons but the office of the Registrar of Companies never took any action to verify the existence of the companies at the so-called addresses. Since the existence of the respective share applicants itself is not found to be proved, the Assessing Officer could not further enquire as to the source of their investment. Therefore, none of the case law relied on by learned counsel for the assessee will apply to the facts of the present case. As rightly contended by the le....
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....e, it will be putting blinker on the eye to believe that the company commands premium as high as nine times its face value. Therefore, there is something more than that meets the eye. Mere filing of undated confirmation letters/affidavits will not prove the identity of the share applicants or the genuineness of the transaction. The observation of the hon'ble Supreme Court while deciding the special leave petition in the case of Lovely Exports P. Ltd. [2009] 319 ITR (St.) 5 ; 216 CTR 195, cannot be considered to be a law declared which has a binding precedent under article 141 of the Constitution of India. Such observations are purely on the facts of the respective case and cannot be applied across the board even when the facts in other ....