2009 (8) TMI 1204

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....addition of Rs. 10,00,000/- made by the A.O. by treating the share application money as unexplained cash credit u/s 68 of Income tax Act, 1961. 2. On the facts and in the circumstances of the case, the ld. CIT (A) has erred in law and facts in deleting the addition of Rs. 20,000/- made by the A.O. on account of commission paid @ 2% for obtaining unexplained cash credit of Rs. 10,00,000/-." 2. A sum of Rs. 10 lacs was added by the Assessing Officer as unexplained share application money. The Assessing Officer has mentioned the details of two parties from whom the assessee has received share application money at page 4 of the assessment order, which is as under :-   S.No. Name Amount Cheque No. Date 1.&nb....

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....with the return of income. The assessee during the course of assessment proceedings had pointed out this mistake and in response to the details of share application money received during the year called for by the Assessing Officer during the assessment proceedings, the assessee had given details of share application money of Rs. 5 lacs received by it. The Assessing Officer without giving any reason and without verifying the books of account, bank statements and other documents has on the basis of balance sheet stated that the assessee had received Rs. 10 lacs as share application money during the year. Thus, learned CIT (Appeals) has observed that Assessing Officer has neither applied his mind nor made any investigation while framing the a....

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....at addition was rightly made by the Assessing Officer and assessee could not prove the receipt of share application money as per requirements of the relevant provisions of the Act and, therefore, the addition has wrongly been deleted by learned CIT (Appeals). 5. We have carefully considered the submissions of learned Senior DR. We have also carefully gone through the assessment order as well as order of CIT (Appeals). The Assessing Officer observed at page 5 of the assessment order that merely furnishing PAN, assessment particulars and confirmation by the share applicants is not enough. This observation of Assessing Officer is contrary to the law explained by Hon'ble Supreme Court in the case of Lovely Exports Pvt. Ltd. (supra). It i....