TaxTMI 
TaxTMI 
2009 (10) TMI 919
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....ppreciating the fact that the proceedings were initiated on the basis of specific information unearthed by the Investigation Wing Delhi and the genuineness of entire transaction was not established by the assessee during assessment proceedings. 2. during hearing of these appeals, we have heard Smt. Aparna Karan, ld. Sr. DR, and Shri H.P. Verma along with Shri Ashish Goyal, ld. Counsel for assessee. Mrs. Karan strongly defended the assessment order by contending that the genuineness of transaction/share application money was not established by the assessee during assessment proceedings, therefore, the ld. first appellate authority is not justified in deleting the impugned additions. The ld. Sr. DR also relied upon the cases and the conten....
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....on Bank 29.6.01 1202400 Suma Finance & Investment Ltd. D.D. Corporation Bank 22.8.01 200300 Deepak Gupta Dir. Amba Alloys D.D. S.B. Indore 2.7.02 300750 Ganesh Goyal Dir. Enpol Pvt. Ltd. D.D. Vijaya Bank 2.7.02 401000 Ganesh Goyal Dir. Zigma Telecom Ltd. Jai Laxmi Corpn. Bank 2.7.02 300000 TOTAL: 2905450 For AY: 2003-04, the assessee submitted the following details by claiming that the amounts were received on account of issue of shares as premium (Amounts in Rs.) Name of Share Applicant Face value of Share (Rs.) Premium amount Number of shares Total Amount (Rs.) Bank Draft Date of Draft Bank Zigma Telecom Pvt. Ltd. (Ga....
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....e on account of unexplained increase in share capital money u/s 68 ignoring the fact that the assessee could not discharge his onus in proving identity, genuineness and creditworthiness of creditor specially in view of the decision of Hon'ble Kolkata High Court in CIT vs. Ruby Traders & Exporters (2003) 263 ITR 300. During hearing of this appeal, we have heard Smt. Aparna Karan, ld. Addl. CIT, DR and none was present for the assessee. Mrs. Karan advanced her arguments which is identical to the ground raised by supporting the assessment order. 2. We have considered the submissions putforth by the ld. Sr. DR and perused the material available on the file. Brief facts are that the assessee is a private limited company, declared income of....
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....41 (SC). As far as the addition u/s 68 of the Act is concerned, we are of the view that no adverse inference is justified if the shareholders fail to respond the notice of the AO. Since the assessee company duly filed the copy of the income-tax returns of the subscribing companies, therefore, the identity of shareholders is proved, consequently, the addition as part of share capital u/s 68 is not justified because the assessee has discharged his onus by proving the identity of the share subscriber. Had any suspicion still remains in the mind of the AO, he could have initiated "coercive process" but this action was not adopted by him, consequently, the deletion of addition by the ld. CIT(A) is quite justified. The Hon'ble Apex Court in t....
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....hare holders as per the provisions of the Act. The Hon'ble Delhi High Court in the case of Divine Leasing & Finance Ltd., General Export and Credits Limited, Lovely Export P. Ltd. (2008) 299 ITR 268 (Del) considered host of decisions including the case of CIT vs. Ruby Traders & Exporters (supra), relied upon by the AO/ld. DR and held that the addition is not justified. The decision of Hon'ble Delhi High Court was affirmed by the Hon'ble Apex Court in CIT Vs. Lovely Exports Pvt. Ltd (2008) 216 CTR (SC) 195 : (2008) 6 DTR (SC) 308. Our view is further fortified by the decision of Delhi High Court in CIT vs. Dolphin Canpack Ltd. (283 ITR 190) (Del) wherein the explanation regarding credits was found satisfactory by the Tribunal, consequentl....
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....ng repeated for the sake of brevity. The whole case of the assessee is based upon the information/investigation made by Investigating Wing of the Department at Delhi. Nothing has been brought on record by the Assessing Officer evidencing that the shareholders are either benamidars or fictitious persons or any part of the share capital is represented by the income of the assessee from undisclosed sources. However, we are making it clear that if the share application money, received by the assessee, from alleged bogus shareholders, whose names are given to the Assessing Officer is found bogus then department is free to proceed to reopen their individual assessments in accordance with law but it cannot be treated as undisclosed income of the p....