2014 (3) TMI 895

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....991-92. The assessee, a public limited company, incorporated under the Companies Act, 1956, carries on business inter alia of investment and financing. The authorized share capital of the assessee company is Rs.1,10,00,000/- divided into 11,00,000 equity shares of Rs.10/- each. During the relevant Assessment Year, i.e. 1991-92 the assessee company issued 6,12,000 equity shares of Rs.10/- each for cash at par by issue of prospectus for total issue amount of Rs.61,20,000/-. However, as on 31st March, 1991, allotment money of Rs.9,16,500/- was in arrears and accordingly the paid up share capital of the company was increased by Rs.52,03,500/- in the Assessment Year 1991-92. In the previous Assessment Year i.e. 1990-91 also the assessee co....

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.... question. The learned Commissioner of Income Tax Appeals found that there were as many as 2155 allottees, whose names, addresses and respective shares allocation had been disclosed. The Commissioner of Income Tax Appeals, further found that the Assessee Company received the applications through bankers to the issue, who had been appointed under the guidelines of the Stock Exchange and the Assessee Company had been allotted shares on the basis of allotment approved by the Stock Exchange. The Assessee Company had duly filed the return of allotment with the Registrar of Companies, giving complete particulars of the allottees. The Commissioner of Income Tax (Appeals) found that inquires had confirmed the existence of most of the shareholder....

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....is Court in Commissioner of Income Tax Vs. Ruby Traders and Exporters Limited reported in 236 (2003) ITR 3000 where a Division Bench of this Court held that when Section 68 is resorted to, it is incumbent on the assessee company to prove and establish the identity of the subscribers, their credit worthiness and the genuineness of the transaction. The aforesaid judgment was rendered in the context of the factual background of the aforesaid case where, despite several opportunities being given to the assessee, nothing was disclosed about the identity of the shareholders. In the instant case, the assessee disclosed the identity and address and particulars of share allocation of the shareholders. It was also found on the facts that all the s....