TaxTMI 
TaxTMI 
2012 (9) TMI 797
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....sessees opened Bank Account on one Bank and on two particular dates. 2. The Ld. Commissioner of Income Tax(A ignored the fact that all 10 share applicants have income below taxable limits and filed income tax returns first time. 3. The Ld. Commissioner of Income Tax (A) ignored the fact that all these accounts have been operated by other than account holders and Sh. Sudhir Kumar Garg was sole introducer in all these 10 accounts and all account holders have deposited cash in their Bank Account. 4. On the facts and in the circumstances of the case, the order of the Ld. CIT(A) deserves to be set aside and that of the Assessing Officer be restored. 2. The brief facts of the case are that the assessee company is engaged in the....
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....osited in the bank accounts of persons was out of their current income as well as from accumulations of savings of earlier years. Reliance was placed on the judgement of Allahabad High Court in the case of Jaya Securities Limited 2008 Taxman 166/7, wherein it was held that if the assessee has provided all the details of investments then addition u/s 68 can not be made. Reliance was also placed upon the following judgements:- (i) Khandelwal Constructions Vs. CIT, (1997) 227 ITR 900, 904 (Gauh) It has been held that no addition can be made on account of the amount of cash credits in the absence of any proper enquiry. (ii) CIT Vs. Stellar Investment Ltd. (1991) 192 ITR 287, 288 (Del) to the effect that even if it be assumed that the subs....
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.... assessee is pending before Hon'ble High Court and instead of relied upon the following cases:- (1) CIT vs Sophia Finance Ltd. 205 ITR 98. (2) Anand Wollen Mills (P) Ltd. Vs. CIT (2002) 174 CTR (DEL) 477. Wherein it was held that amount appearing in the books of assessee company and described its share application money can be considered and assessed in the hands of assessee u/s 68 of the Act. 4. The AO after analyzing the tax returns filed by the share applicants, found that all share holders were engaged in petty jobs and their levels of incomes were not sufficient to make investments of this magnitude. The AO made a total addition of Rs. 40 lacs by observing as follows:- 1. All the above share applicants has income below t....
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.... Reliance was placed on the following judgments of various Courts: (a) Inida Rice Mills Vs. CIT, 218 ITR (1996) at page 508 (Allahabad High Court). (b) Surendra Mahan Seth Vs. CIT, 221 ITR (1996) at page 239, (Allahabad High Court). (c) Jaya Securities Ltd. Vs. CIT-II, Kanpur, 166 TAXMAN (2008) at page 7 (Allahabad High Court). 6. The Ld. CIT(A) after hearing submissions filed by the Ld. AR deleted the addition made by AO. While finalizing the appellate order, the CIT(A) referred to the following judgments of various Courts :- (i) Gangour Investment Ltd. 179 Taxman I (Delhi). (ii) Bav Shakti Steel Mines P. Ltd. 179 Taxman 25 (Delhi). (iii) Lovely Exports Pvt. Ltd. & Others 216 CTR 195 (SC) & 299 ITR 268 (Delhi). (iv....
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....st have obtained for this purpose. In any circumstances, if any action is to be taken in this case where in Assessing Officer was not satisfied the same should have been referred to the income tax file of concerned share applicant who is the only best source to tell how and in what circumstances, he or she has deposited share application money with the appellant company." 9. Aggrieved the revenue has preferred an appeal before this Tribunal. 10. The Ld. DR argued that no shareholder was produced and moreover they were small persons with small incomes. The Ld. DR further argued that Bank Accounts were opened merely to deposit money in cash and then for issuing cheques/drafts in favour of the company. In view of the above, he contended ....
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.... taken some loans from family members for making investment into the company which does not seem to be correct as there is no evidence of old income tax return or statement of share applicants that they had taken loans from some family members for investment into the company. 15. Though there are contradictions in findings of Assessing Officer and Ld CIT(A) as enumerated above but in view of the judgment of Hon'ble Supreme Court in CIT v. Lovely Exports Pvt. Ltd. Taxman Volume-172 page 44 wherein it was held that if the names & addresses and confirmation from share holders has been provided by the company to the Assessing Officer then the share application money cannot be added in the income of the company u/s 68 of the Income Tax Act, 1....