TaxTMI 
TaxTMI 
2011 (7) TMI 235
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....he case of CIT v. Steller Investment Ltd. [2001] 251 ITR 263 is legally sustainable in the eyes of law? (iii) Whether in the facts and circumstances of the case, the action of the authorities below is result of an error in interpreting the decision of the Hon'ble Apex Court in the case of Lovely Exports (supra)? (iv) Whether in facts and circumstances of the case, the authorities below have erred in applying the proviso to section 36(1)(iii) of the Act when the disputed amount was subject matter of litigation? (v) Whether in facts and circumstances of the case, the impugned orders Annexures A-1 to A-3 passed by the authorities below, are legally sustainable in the eyes of law?" 2. Briefly stated, the facts necessary for adjudication as narrated in the appeal are that the assessee filed its return for the assessment year 2005-06 on 31-10-2005 declaring an income of Rs. 34,58,867 which was reduced to nil by adjusting brought forward losses of the earlier years. The return of the assessee was processed under section 143(1) of the Act on 6-3-2006 and demand of Rs. 9900 was raised on account of interest under sections 234B and 234C of the Act. T....
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....sys (P.) Ltd. IT Appeal No. 1469 of 2010, dated 27-9-2010]. Learned counsel also urged that the disallowance of Rs. 6,00,000 on account of interest relatable to advances to Mr. Ashok Anand and Mrs. Raj Rani Anand under section 36(1)(iii) of the Act was unsustainable. 5. We do not find any substance in the submission made by learned counsel for the assessee. The Tribunal while upholding that the amount of Rs. 42,78,756 received by the assessee as share application money was infact undisclosed income of the assessee had adjudicated the said issue against the assessee with the following observations:- "7. The assessee is a unlisted company and had not made any public issue. During the year under consideration, the assessee had received Rs. 42,78,756 as share application money through private placing. The assessee was asked to furnish the details thereof. In reply the assessee furnished the names of persons as per Annexure II where mostly the amounts were shown to have been received from some names of village and P.O. Alewa, Jind, Haryana as noted by the Assessing Officer. The Assessing Officer was of the view that the assessee had failed to discharge primary onus to establish th....
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....t pages 7 to 34 of the paper book in which the requisite details of each persons was given. The Ld. D.R. for the revenue placed reliance on the order of CIT(A) and pointed out that the amounts in question were received in cash and the identity of the share holders not having been established, the addition merits to be upheld. 10. We have heard the rival submissions and perused the record. The assessee company during the year under consideration had raised share application of money of Rs. 42,78,756. The entire share application money was received in cash and as per the claim of the assessee the sum was received from 28 persons. The assessee had furnished on record the copies of share application forms submitted for allocation of shares, copies of which are placed at pages 7 to 34 of the paper book. The perusal of said share application forms revealed the assessee to have furnished the names, father's name and addresses of the parties which were found to be incomplete by the Assessing Officer/CIT(A). In some cases even the address were found to be incomplete. 11. The issue involved in the present ground came up for consideration before the Hon'ble Apex Court in CIT v. Lovely E....
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....of the subscriber in relation to the share application money received. Where the assessee fails to establish the identity of the subscriber, the onus cast upon the assessee to prove that the credits are genuine does not stand discharged. The Assessing Officer during the course of assessment proceedings, on the perusal of the information furnished by the assessee found the assessee to have only disclosed the names of the persons and incomplete addresses were bearing only thumb impression. The total share application money was received in cash and not through banking channels and none of the said persons were Income-tax assessees nor had any PAN numbers. In the facts of the present case the assessee has failed to prove the identity of the subscriber and applying the ratio laid down in the case of Lovely Exports (P.) Ltd. (supra), we are in conformity with the order of CIT(A) and uphold the addition of Rs. 42,78,756." 6. The assessee was unable to establish the identity, creditworthiness and the genuineness of the transaction so as to escape from the provisions of section 68 of the Act. Whether an addition is to be made in the hands of the company or individual assessee in such cir....