TaxTMI 
TaxTMI 
2010 (10) TMI 237
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....zure operation carried out under section 132(1) the respondent was served with a notice under section 153(c) read with section 153A of the Income-tax Act on 24-5-2004. The assessee filed its return of income declaring total income as Rs. Nil. The case was picked up for scrutiny and notice under section 143 of the Act was served upon the assessee. The respondent/assessee appeared before the Assessing Officer. The Assessing Officer on consideration of the contention raised by the assessee in respect of Share Application Money received by the assessee during the relevant year found that the assessees had received Share Application Money from few persons who are not assessed to income-tax and PAN was not mentioned. The Assessing Officer disbeli....
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....iled confirmation from the subscribers through duly notarized affidavit containing the details like name, address, age, source of income, annual income, date of purchase of application of share tendered, number of shares purchased along with the amount given by subscribers. On receipt of these confirmations, neither anything was asked from the assessee nor any inquiry was made. The addition of Rs. 1,59,300 was made by the Assessing Officer by observing as under : On perusal of submission made by the assessee in respect of share application money received by the assessee during the year. It is seen that in respect of the following persons the assessee has received share application money in cash. These persons are not assessed to income-tax....
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....t have not been disapproved. Thus undisputed fact is that the assessee has proved the identity of the subscribers, with the help of affidavits which were not found to be bogus or false. An affidavit is not a mere piece or paper rather it carries its authenticity as the contents of the same are duly sworn before a Magistrate, or a Notary Public/Oath Commissioner, as the case may be. During signing of these affidavits, the deponent appears before the person before whom they are sworn and their signatures are duly taken on the register maintained by such Notary Public. If the Assessing Office was apprehensive on the authenticity of such affidavit, nothing prevented him to cross examine the deponents and to verify the contents of such affidavit....
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.... Delhi High Court in CIT v. Divine Leasing & Finance Ltd. General Exports & Credit Ltd., and Lovely Exports (P.) Ltd. [2008] 299 ITR 268 wherein it was held that it is the duty of the Assessing Officer to investigate the credit-worthiness of the shareholders and in view of the finding that the assessee proved genuineness of shareholders no addition can be made under section 68 of the Act. In the present appeal, since the assessee has discharged its onus by proving the identity of subscribers and even otherwise had any suspicion still remained in his mind, nothing prevented him to initiate action as per the provisions of the Act. The existence of subscribers to share application is not in doubt as the assessee duly furnished their names, age....
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....counsel for the appellant argued that the Tribunal has committed error in not considering the law laid down by this Court in the case of CIT v. Rathi Finlease Ltd. [IT Appeal No. 63 of 2004, dated 11-10-2007] in which it has been laid down that onus is on the assessee to establish the genuineness of the credits. He also argued that no opportunity was available to the appellant to controvert the affidavits. 6. Having considered the contention of the appellant we find that the Tribunal has taken note of judgment of this Court in the case of Rathi Finlease Ltd. (supra) as also the various judgments of the Supreme Court as well as Delhi High Court and has held that though it is the duty of the assessee to establish the genuineness of the credi....