TaxTMI 
TaxTMI 
2010 (2) TMI 646
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed. On scrutiny of the same, the Assessing Officer found that the assessee had undisclosed income for the block period. The assessee filed return of income. Notice under section 158BC was issued to which the assessee filed return of income for the block period on January 14, 1999 disclosing nil income. The Assessing Officer by his order dated July 28, 2000 under section 158BC read with section 143(3) of the Act determined the undisclosed income for the said block period of Rs. 1,52,82,756 on three heads, viz., (1) unexplained investment in share capital in the names of employees of the group and their relatives as sources not explained for Rs. 1,17,88,000, (2) excess unexplained cash found on the day of search of Rs. 5,79,170, and (3) unexp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e said amounts had been noted differently in the books of account and the same was transferred to a reserve account in the balance-sheet, so that it could be deposited with the Government or returned to the customers. The aforesaid explanation given that there were trade advances was not accepted by the Assessing Officer and accordingly, the said amount was also brought to tax. 4. Being aggrieved by the order of the Assessing Officer, the matter was carried in appeal before the Commissioner (Appeals) by the assessee which appeal came to be dismissed and being aggrieved by the said order the assessee had filed an appeal before the Income-tax Appellate Tribunal which however by its order dated March 31, 2005 allowed the appeal. As a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g and consequently recorded a perverse finding ? (iv) Whether the Tribunal was correct, in not taking into consideration the specific instances where the Assessing Officer had noted cash introduction in bank accounts of employees of Rs.1,00,000. Rs. 2,00,000 and Rs. 50,000 and subsequent payments for purchase of shares when these employees could not establish making such payments through any source as the agricultural income, the income from chits funds and small savings could not be established by adducing sufficient evidence ? (v) Whether the Tribunal was correct in holding that a sum of Rs.5,79,170 excess unexplained cash discovered which was treated as an undisclosed income in search proceedings could not be treated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and the Assessing Officer had rightly brought the income to tax and therefore, the order of the Assessing Officer and the appellate order by setting aside the order of the Tribunal have to be upheld in the instant case. 6. Per contra, learned counsel for the respondent relying upon the decision of the apex court in the case of CIT v. Lovely Exports P. Ltd. [2009] 319 ITR (St.) 5 (SC) submits that as far as the share application money is concerned, if the same has been received by the assessee-company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the Department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ividual assessments in accordance with law but it cannot be regarded as undisclosed income of the assessee-company. To the same effect is another decision of the apex court in the case of CIT v. Steller Investment Ltd. [2001] 251 ITR 263. In the instant case, except three persons all other persons have admitted that they have paid towards subscription of the shares It therefore cannot be held that there has been no explanation offered with regard to the investment received by way of share capital taking into account the fact that the persons had admitted that payment of the share subscription money except three persons. Under the circumstances, we hold that the substantial questions of law raised by the Revenue with regard to this aspect of....