TaxTMI 
TaxTMI 
2016 (4) TMI 575
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....facts of the case are that the appellant is a private limited company derived its income from interest , dividend and capital gains. It filed its return of income on 20th March 2007 declaring income of Rs. 9050/-. During the year the assessee has issued share capital of Rs. 15 lacs, share application money of Rs. 1.25 lacs and fresh share premium of Rs. 50 lacs. Contributor to this amount were 27 persons. The ld AO during the assessment proceedings asked the assessee to prove the identity, creditworthiness and genuineness of the transaction. In response to that the assessee submitted certain details. Based on these details the ld AO issued notice u/s 133(6) to the bankers of some of the share applicant as the AO was of the view that credit by way of transfer entries in the bank account of depositors equal to the amount of money being invested in the assessee company. It was found that cash is deposited in somebody else account and that person was giving credit entry to various depositors who in nturn were depositing the sum in the banck account of the assessee company. AO was of the view that as the similar pattern is available in case other share holders and depositors assessee is....
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.... Mantoia, Paharganj N. Delhi AAIPJ6994L 200000 8. Mukesh Kurnar 74, Gyan Park. Gali No.-5, Chander Nagar,, N. Delhi AGZPK93B1M 300000 9. Shashi Jain 527, Mantoia, Paharganj, N. Delhi AAEPJ1122C 350000 10. RamSingh 2124, Khobiwara, Kinari Bazar, Delhi ALXPS7321Q 200000 11. Anni Chopra B-4/34, Sector-7, Rohini, N. Delhi ADXPC5152D 200000 12. Rakesh Jain 2/57637 Block No.-5, Dev Nagar, Karct Bagh, N. Delhi ACWPJ6675Q 200000 13. Pawan Kumar 1655/35, Naiwala, Karol Bagh, N. Delhi AGCPK0255H 250000 14. Anil Kumar 6636/6, Block No.-9, Dev Nagar, Karol Bagh, N. Delhi AGCPK0256E 250000 15. Parveen Jain 40, Tibbia College, Karol Bagh, N. Delhi ACVVPJ6676P 225000 16. Renu Kapcor 460, Mantola. Paharganj, N. Delhi- AHAPK3312J 275000 17. Kulbhushan Kapoor 460, Mantola, Pahargenj, N. Delhi AHNPK8821F 225000 18. Shushila Devi 4G, Hostel Nurses Qrts.. . New Rohtak Road,.Karol Bagh ADVPD1751D 250000 19. Datta Ram Jain 40, Hostel Nurses, Qrts, New Rohtak Road, Karol Bagh, New Delhi ACWPJB225G 250000 20. Kaushalya Devi B-4/34, Secor-7,....
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....annelized its unaccounted income through the modality of share capital * There was failure to produce all the share applicants and their complete bank statements, 2.3 My finding on each of the AO's argument is as under : (a) The view that the appellant prevaricated and in a way made to amend its earlier information of some aspects of share applicants i.e bank details, only because of on going enquiry initiated by the AO needs to be contrasted against facts on record, As per the AO , he requisitioned the complete bank statements of Ram Prasad, Nitin Jain, Ram Singh, Anil Kumar , and Rajendra Singh , and in response there to, according to the AO, the appellant submitted that there was error in giving bank details of "all the above share applicants " and fresh set of confirmations .was filed. Records show AO that name of the bank branch was typed wrongly in cases of Kaushalya Devi, Vijender Gupta, Anita Chopra, Rajesh Kumar Chopra, and Rajinder Singh ", and corrected confirmation by giving the right name of the bank branch was being filed. In 4 of the 5 share applicants as can be seen; the AO's requisition and the appellant's amended information did no....
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....ross examine the witness . This was in response to order-sheet noting dated 25-11-2008, which runs as under : ' Present. Sh Sanjay Gupta, CA. He has filed his POA. He has been confronted with the statement of Mrs Rents Kapoor,whose statement was recorded denying any dealing with the assessee co. ' The order sheet notings do not reveal that any such statement of Renu Kapoor was made available to the appettant, The appellant's further request to allow cross examination of the witness has also not been acceded. In a way, the statement of Renu Kapoor on the basis of a figure of investment douDle the size of her actual investment has been employed against the appellant without releasing the copy her statement or affording an opportunity to cross examine the witness. It is trite law that cross-examination is germane to due process of taking evidence and no adverse inference can be drawn against a party unless the party is put on notice of the case made out against him. The assessee must be supplied with the contents of ail such evidences, both oral and documentary, so that he can prepare to meet the case against hint. This necessarily also postulates t.hut he should cross ....
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....s of the transaction and the veracity of the repudiation ." The ratio that merely because summons issued to the share applicants could not be served or that they failed to appear before the AO is not a valid ground to regard the share application money as appellant's unexplained income has also been rendered in CiT vs U.M.Shah 90 !TR 396{Bom ), Rohini Builders vs DC1T 117 Taxman 25 (Mag ), Jagdarnba Construction Co vs ITO 3 SOT 670 (Jodhpur ). Alluding to the decisions supra, since the appellant has tendered evidences relating to PAN, confirmations of remittance ^affidavits certifying the transmission of share application money, copies of income tax returns of share applicants, I hold that the AO could not have invoked the provisions of section 68 in respect of the share application money obtained by the appellant. (e) The AO on enquiry at the bank accounts of the share applicants has found linkage between some of the share applicants and some third parties, namely, Banke Bihari Securities, and Shivshakti Enterprises, According to the AO, cash has been introduced in bank accounts of these 2 concerns where from cheques have been drawn in favour of the share applicants, and in....