2012 (10) TMI 676

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....(in short, the Act) arises out of order dated 14.8.2008 passed by the Income-Tax Appellate Tribunal, Agra Bench, Agra in ITA No. 275/Agr/2007 for the assessment year 2004-05. The department has preferred following substantial questions of law for consideration by the Court:- "(1) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in overruling the Full Bench decision of the Hon'ble Delhi High Court in the case of M/s CIT vs. Sophia Finance Ltd (1993) 113 CTR (FB) 427/205 ITR 98 (Delhi), and also decision in the case of M/s Bhola Shanker Cold Storage vs. JCIT (Cal) 270 ITR 48, relied upon by A.O. wherein Hon'ble Court held that the A.O have the right rather he is duty bound to investigate the genui....

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....l has, relying on the judgment of Supreme Court in CIT v. Lovely Exports (P) Ltd 299 ITR 268 and the judgment of this Court in Jaya Securities Limited vs. CIT-II Kanpur (2008) 166 Taxman 7 (All), held that where the identity of shareholders stood proved on record, the amount of share application money could not be added to the income of the assessee. In such a case the amount could be taxed at the hands of the persons who had invested.   6. In Commissioner of Income Tax v. Lovely Exports (P) Ltd (supra) the Supreme Court held as follows:-   "Delay condoned.   2. Can the amount of share money be regarded as undisclosed income under S.68 of IT Act, 1961? We find no merit in this Special Leave Petition for the simple re....

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....y stand established and proved on record. The learned A.O wants these deposits to be treated cash-creditors and expects the assessee company to prove their creditworthiness so also the genuineness of the transactions. We do not agree with learned A.O or learned CIT (A) for that matter. When once the identity of share applicants is proved, the onus now shifts on the Revenue and the onus cast on the assessee gets fully discharged. The Hon'ble Jurisdictional High Court has recently held that no addition under section 68 of the act can be made in respect of investment made by different persons in share capital of the assessee company, limited by shares, whether public or private. This was so held by the Hon'ble Allahabad High Court in the case ....