TaxTMI 
TaxTMI 
2013 (8) TMI 362
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....nce of 10% of certain expenses amounting to Rs.2,40,880/- on adhoc basis. " Ground No.3 The appellant craves leave to add, alter, amend, modify, delete or substitute any ground of appeal at the time or before hearing of appeal." ITA No. 39/Ag/2012 by the Revenue :- "1. Whether on the facts and in the circumstances of the case the Ld. CIT(A) was justified in deleting the addition of *Rs.58,29,000/- made on account of unexplained credit in the form of Share application Money." (*amount should be Rs.58,29,200/-) 3. The brief facts of the case are that the assessee is a Public Ltd. Company engaged in the business of manufacturing and trading of edible oil, soap, mustard cake, vanaspati etc. The assessee company filed return of income, declaring income of Rs.2,24,28,820/-. During the assessment proceedings, the A.O. noticed that the assessee has allotted 88819 shares having value of Rs.88,81,900/- to various persons. The A.O. made the addition of Rs.88,81,900/- as the assessee has failed to discharge the burden regarding the capacity and genuineness of the transactions. 4. The CIT(A) confirmed the addition to the extent of Rs.30,52,700/- and deleted the balance amount ....
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....hares), the appellant has simply given their PAN without any supporting documentary evidence in form of bank statements, copy of IT returns, evidence regarding source of income etc. to prove their creditworthiness and genuineness of the transaction. At the most it only proves their identity. It has been held by Hon'ble Calcutta Hgh Court in case of CIT Vs. Korlay Trading co. Ltd., (1998) 232 ITR 820 (Cal) that though the department often acts on confirmatory letters but even the income tax particulars, where the creditor is assessed, may not be sufficient. The same Hon'ble Court has also held that if the appellant gives only the list and the ingredients of Section 68 are not proved by it, the said provisions are attracted even if the payment has been received through cheques as it is the assessee and the assessee also who is to offer the explanation, whether initially or subsequently. It is clear from the wording of Section 68 that the onus is laid upon the appellant alone to furnish all relevant information in respect of entries made in its books of accounts. Mere filing of Income Tax file Nos. or PAN is not sufficient. Their share certificates and share application forms have als....
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....ore passing the order on 30.12.2010. Though Section 68 empowers the A.O. to make enquiries to find out the true nature and source of a sum credited in the account books even if it is credited as receipt of share application money. However, it has been held by Hon'ble Gauhati High Court in case of Khandelwal Constructions Vs. CIT (1997) 227ITR 900 (Gau) that Section 68 of the Act empowers the Assessing Officer to make enquiry specifically to satisfy regarding the cash credit. If he is satisfied that these entries are not genuine, he has every right to add these income as income from other sources. The satisfaction of the Assessing Officer is the basis of invocation of the powers under Section 68 of the I.T. Act and the satisfaction must be derived from relevant factors on the basis of proper enquiry. The enquiry envisaged under section 68 is an enquiry which is reasonable and just. The Assessing Officer surely has the jurisdiction to look into these credits and make necessary enquiry and come to a finding on such an enquiry in a proper and fair manner. Thus, the A.O. is entitled, and it would indeed be his duty, to enquire whether the alleged shareholders do in fct exist or not and ....
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....found that the pertaining share application money of Rs.1,50,000/- was pending for allotment as on 31.03.2007, therefore, A.O. is not correct in drawing inference that the shares have been allotted this year for money received. Since the amount was received in earlier year, therefore, the addition of Rs.1,50,000/- is not warranted under Section 68 of the Act as one of the requirement of Section 68 is that the amount must be credited or received during the year. 9. The CIT(A) while deleting the addition of Rs.56,79,200/- found that the assessee has furnished Permanent Account Number, copy of return, share application form, share certificate. In view of the documents furnished by the assessee, the CIT(A) relied upon the judgment of Hon'ble Delhi High Court in the case of CIT Vs. Divine Leading & Finance Ltd. (2008) 299 ITR 268 (Del) wherein it has been held that company concerned cannot be expected to know every detail pertaining to the identity as well as financial worth of each of its subscribers. The CIT(A) further found that the assessee company made available relevant material before the A.O. and the A.O. has failed to unearth any wrong or illegal dealings. The CIT(A) held th....
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.... Income tax file Nos. or PAN is not sufficient. The relevant share certificates and share application forms were not produced by the assessee company neither before the A.O. nor before the CIT(A). Similarly, the CIT(A) while confirming the addition of Rs.12,23,000/- held that the assessee has failed miserably to prove with any supporting documentary evidence. The assessee has furnished only share application money through cheques. In absence of material the CIT(A) sustained the addition of Rs.12,23,000/- for want of evidence and material on account of assessee company to discharge the burden in respect of Section 68 of the Act. We find that the CIT(A) has examined each and every entry of share application and found that the assessee has failed to discharge the burden in respect of Section 68 of the Act pertaining to amount of Rs.30,52,700/-. We, therefore, find that the CIT(A) has rightly confirmed the addition of Rs.30,52,700/- (Rs.12,23,800 + Rs.18,28,900). 11. In the light of above discussions, we confirm the order of the CIT(A) on the issue. Thus the Ground No.1 raised by the assessee and ground no.1 raised by the Revenue both are dismissed. 12. Now we are taking the seco....