2013 (10) TMI 156

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....n by relying on the Hon'ble Apex Court's decision in the case of CIT v. Lovely Exports (P.) Ltd. [2008] 216 CTR 195 without appreciating the fact that the above SLP filed by the Department was dismissed in limine without being admitted and in the present case, the assessee was unable to establish the creditworthiness of the investors and the genuineness of the transaction as mandated by section 68 of the Act, which also gets support form the recent decision of the Hon'ble Delhi High Court in the case of CIT v. Frostari (P) Ltd. Reported in (2012) 18 taxmann 18 (Jhar) the decision of ITAT Indore Bench in the case of Vaibhav Cotton (P) Ltd. (2912) 26 taxmannm 352 (Indore) wherein the cases relied upon by the ITAT in the case of Lovely Export ....

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....bove discussion, I am of the view that only addition in case of above category of persons wherein either they have denied having contributed for share application money or no person was found at the address given by the appellant or where no confirmation was submitted by the appellant during the assessment proceedings, which comes to Rs.13,00,1090, (i.e., category A, E and F).      3.42 The Assessing Officer is therefore directed to restrict the addition to Rs.13,00,100 as against he same made of Rs.55,00,000. The appellant gets relief of Rs.41,99,900 on this score.      4. In the result the appeal is partly allowed." The said decision of the CIT (Appeal) gave rise to two cross appeals at the....

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....icted to that extent of Rs.9,00,000/- in respect of only those applicants of shares who have denied to have made any investment in the share of the company. We hold accordingly." Having heard the learned counsel for Revenue we do not find that the Tribunal committed any error. The Supreme Court in the case of Lovely Export (P.) Ltd. (supra) observed as under:      "Delay condoned. Can the amount of share application money be regarded as undisclosed income under section 68 of the Income-tax Act,1961 ? We find no merit in this special leave petition for the simple reason that if the share application money is received by the assessee Company from alleged bogus shareholders, whose names are given to the Assessing Offi....