TaxTMI 
TaxTMI 
2013 (7) TMI 162
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....s as per company's records iii) Application of the investors iv) No. of shares allotted v) Amount invested vi) Mode of payment (In none of the cases the amount is received by cash and in all the cases the amount is received by proper banking channel). vii) Cheque/DD Number & bank on which the same was drawn. viii) Confirmation of investors ix) Return of incomes of the investors x) Statement of affairs of the investors The appellant had submitted all the information at the time of assessment proceedings. The appellant not only gave all the particulars but also gave full information for enabling the AO to actually track the investors. The entire addition has been made by the AO without appreciating the facts of the appellant. Further it may be mentioned that the appellant had discharged the onus which lied on it by producing all the evidences for proving the genuineness of the investors. It has given full particulars of the transactions and it has also provided material which would enable the Assessing Officer to track the investors. Hence the addition has been made purely on the basis of surmises and conjecture....
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....essing Officer are clearly based on assumptions, presumptions, conjectures and surmises inasmuch as he came to the conclusion in complete disregard and ignorance of the supporting documents and evidences filed during the proceedings. Under these circumstances, no addition can be made under section 68 of the Income Tax Act, 1961. Following courts' citations are relevant on this point:- i) Dhiraj Lal Girdhari Lal VS. CIT - 26 ITR 736. ii) Omar Salay Homammed Sait vs. CIT - 37 ITR 151 iii) Dhakeshwari Cotton Mills Ltd. vs. CIT - 26 ITR 775. iv) Lalehand Bhagat Ambika Ram vs. CIT - 37 ITR 288" Against this deletion of addition u/s 68 of the Act, the revenue is in appeal by taking the following grounds :- "1. On the facts and circumstances of the case and in law the order of the CIT(A) is wrong, perverse, illegal and against the provisions of law which is liable to be set aside. 2. On the facts and in the circumstances of the case, the learned CIT(Appeal) has erred in deleting addition made of Rs. 1,10,00,000/- u/s 68 - a. that before the issuance of cheques from the bank accounts of the share applicants there were ma....
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....iled to furnish satisfactory explanation for this amount. In all other cases, the Assessing Officer received confirmations and the acknowledgement of the ITRs. During the assessment proceedings, the assessee has furnished the following documents before the Assessing Officer :- i) Names of the investor ii) Their complete address as per company's records iii) Application forms iv) No. of shares allotted v) Amount invested by the said person vi) Mode of payment (In none of the cases the amount is received by cash and in all the cases the amount is received b proper banking channel). vii) Cheque/DD Number & bank on which the same was drawn. viii) Particulars of share allotment. ix) Confirmation of share applicant x) Copies of ITR and other income tax particulars of share holders. The Assessing Officer was provided with names and full addresses of these 39 investors. The Assessing Officer was also provided details of mode of payment. In all the cases, the amount was received by account payee cheques only. The details regarding number of shares allotted with particulars of share allotment and....
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....sted and details of number of shares applied were also furnished to the Assessing Officer. The assessee has also given the details of mode of payment and cheque/demand draft numbers and the banks from which the amounts were received. The confirmations from the investors were also filed before the Assessing Officer. The assessee has filed the copy of return of income of these investors. Thus, the assessee has furnished the relevant information during the assessment proceedings itself. In our considered view, assessee had discharged obligation/onus as laid out in section 68 of the Act. The assessee has provided to Assessing Officer the information by which he could have tracked the investors by way of further investigation if required. In this situation, we hold that the assessee has discharged the onus casting upon it u/s 68 of the Income-tax Act, 1961. In our considered view, the assessee submitted a satisfactory explanation for the credits received in its accounts in the form of share application. Once the assessee has discharged the initial onus lay on it in terms of section 68 of the Income-tax Act, 1961 for proving the identity of the person and creditworthiness along with the ....
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....ands of the assessee." Similarly Hon'ble Supreme Court in the case of CIT Vs. Orissa Corporation P. Ltd. - 159 ITR 78 has held as under :- "Held, that in this case the respondent had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notices under section 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy. There was no effort made to pursue the so called alleged creditors. In those circumstances, the respondent could not do any thing further. In the premises, if the Tribunal came to the conclusion that the respondent had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arose. The High Court was right in refusing to state a case." The assessee....