TaxTMI 
TaxTMI 
TaxTMI 
2013 (11) TMI 674
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....e, the hearing has not been concluded, so that proper opportunity is being afforded. There has been no representation by the assessee in the matter ever since, i.e. on the two occasions when the Bench functioned, being 06.06.2013 and 07.08.2013, on which date the assessee came up with another specious plea of being allowed time for change of counsel. 1.2 Adjournment is not a matter of right. Rather, we infer insolence and a complete disregard for the process of law by the assessee in the matter. It was under these circumstances that the hearing was proceeded with ex parte, and concluded on that date (07.08.2013). 2. Before us, the ld. Departmental Representative (DR) strongly relied on the orders of the authorities below, claiming that proper opportunity had been granted to the assessee to state its case. 3. We have heard the parties before us, as well as perused the material on record. 3.1 The principal issue arising in the instant case, agitated by the assessee per its ground no.1 is the maintainability in law of the assessment of share application money in the sum of Rs.2778.50 lacs as unexplained income u/s.68 of the Act. In other words, whether the assessee has been able t....
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....vidence casting an obligation on the assessee to satisfactorily explain a credit in its books of account. The admitted fact of the receipt of the sum is an evidence against the assessee, and in the absence of it being satisfactorily explained as to its nature and source, the same is liable to deemed as the income of the assessee for the relevant year, i.e., the year in which the said sum is found so credited. This capsules the trite law, equally applicable to the share application money or share capital, expounded and elucidated by the apex court in and over a number of decisions, which are considered as locus classicus on the subject, viz. Govindarajulu Mudaliar vs. CIT [1958] 34 ITR 807 (SC); Kale Khan Mohammad Hanif vs. CIT [1963) 50 ITR 1 (SC), Sreelekha Banerjee & Ors. vs. CIT [1963] 49 ITR 112 (SC), Roshan Di Hatti vs. CIT [1977] 107 ITR 938 (SC); and CIT vs. P Mohanakala & Ors. [2007] 291 ITR 278 (SC), most of which have been relied upon by the Revenue. The Revenue is under no obligation to show from what source the income was derived by the assessee and why it should be treated as its concealed income. As stated in Govindarajalu Mudaliar (supra) (at pg.810) the same is as u....
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....) Divine Leasing and Finance Limited (2) General Exports and Credits Ltd. and (3) Lovely Exports P. Ltd. [2008] 299 ITR 268 (Del). The court after examining the legal position, which it clarified to remain unchanged, i.e., with regard to the legal principles and positions involved, to be essentially a matter of fact, so that no question of law, much less substantial question of law arose for consideration. With regard to the issue of discharge or otherwise of the onus cast on the assessee it will be relevant to reproduce the relevant observation of the court, which is as under: "There cannot be two opinions on the aspect that the pernicious practice of conversion of unaccounted money through the mas- querade or channel of investment in the share capital of a company must be firmly excoriated by the Revenue. Equally, where the preponderance of evidence indicates absence of culpability and complexity (complicity) of the assessed it should not be harassed by the Revenue's insistence that it should prove the negative. In the case of a public issue, the company concerned cannot be expected to know every detail pertaining to the identity as well as financial worth of each of its subscri....
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..... [2013] 357 ITR 184 (Del) and CIT vs. Youth Construction P. Ltd. [2013] 357 ITR 197 (Del). We may reproduce for the sake of clarity the observations by the hon'ble court in the later case : "Section 68 of the Income-tax Act, 1961, applies equally to share application monies received by an assessee and, therefore, the burden is on the assessee to prove the nature and source thereof, to the satisfaction of the Assessing Officer. It involves there ingredients, namely, the proof regarding identity of the share applicants, their creditworthiness to purchase the shares and the genuineness of the transaction as a whole. Held, that there was enough material in the possession o the Assessing Officer which warranted explanation from the assessee regarding the nature and source of the share application monies. The assessee had done little to discharge its burden under the section. The Tribunal had failed to keep in view the broader picture and had taken a rather simplistic view of the matter, ignoring the factual aspects and surrounding circumstances present in the case. It should have dealt with the case in a holistic manner dealing with the entire evidence relied upon and having regard t....
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.... time. Further, how, we wonder could the assessee this legal plea inasmuch as the confirmations as afore-noted from the creditors have not been filled by it. True, the A.O. has not created any further investigation in the matter relying solely on the findings by the investigation wing. However, firstly, as afore-stated he is fully entitled to do so, and secondly, the question of the same would only where the assessee furnishes any material controverting the said incriminating information in the position of the Revenue. The furnishing of the documentary evidences, viz. the share application money, balance-sheet of the creditor companies is of little evidential value in the facts of unearth and late bear by the Revenue. Rather, it needs to be appreciated that if the evidence by way of book entries were to be itself sufficient to prove cash credits, section 68 would itself to be misconceived and redundant inasmuch as it is only based on the credit appearing in the books of account. As clarified earlier, it is a rule of evidence castig the burden o proof to exhibit that the said credit in act represents a genuine credit transaction. 3.6 At the same time, however, we also find that, ra....