TaxTMI 
TaxTMI 
2011 (4) TMI 1433
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....count of cash credit u/s. 68 of the I.T. Act. 2. On the facts and in the circumstances of the case, the Ld. CIT(A)-III, Surat ought to have upheld the order of the Assessing Officer. 3. It is therefore prayed that the order of the Ld. CIT(A)-III, Surat may be set aside and that of the Assessing Officer be restored. 2. Facts, in brief, as per the relevant orders are that return declaring income of Rs. 9,96,000/- filed on 28-10-2005 by the assessee, manufacturing yarn on job work basis, was selected for scrutiny with the service of a notice u/s. 143(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act) on 26-10-2006. During the course of assessment proceedings, the Assessing Officer[AO in short] noticed that....
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....other alleged shareholders of Shree Shiv Vijay Processors Pvt. Ltd., Salasar Yarns Pvt. Ltd., and Salasar Nylons Ltd., referred to in your letter, are unavailable not only at the given address but also at the address available from our PAN data-base. Prerana Supply Pvt. Ltd., shows 2 directors, namely Nupur Mitra of AA 273 alt Lake, Kolk- 64 and Niraj Agarwal of 159 Rabindra Sarani, Kolkata. Niraj Agarwal is not available at the given address. Nupur Mitra, a school teacher, denied having any association with Prerana Supply Pvt. Ltd. Despite our whole- hearted efforts these alleged investors could not be traced. As such, share holders, namely, Sahi Agencies (Shipping) Pvt. Ltd., Prerana Supply Pvt. Ltd., Mitra Finance Lease Pvt. Ltd. and Ric....
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....ddl. DIT (Inv.) and relying upon the decisions in CIT vs. Nivedan Vanijya Noyojan Ltd. (2003) 263 ITR 623(Cal.), Hindustan Tea Trading Co. Ltd. v. CIT (2003) 263 ITR 289(Cal), Ruby Traders and Exporters Ltd's case (2003) 263 ITR 300 (Cal). CIT v. P. Mohankala (2007) 291 ITR 278(SC), Sumati Dayal v.CIT Bangalore (1995)(Supp.)(2 SCC 453)., CIT v. Durga Prasad More (1971) 82 ITR 540 (SC), CIT v. Precision Finance Pvt. Ltd. (1994) 208 ITR 465 (Cal.),CIT vs. Korlay Trading Cp. Ltd.,232 ITR 820(Cal.) and Nemi Chand Kothari v. CIT (2003) 264 ITR 254 (Gau.), the entire amount of Rs. 53 lakhs was added u/s. 68 of the Act. 4. On appeal, the Ld. CIT (A) deleted the addition in the following terms:- " I have gone through the submissions....
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....efund vouchers sent to the party at the given address by the A.O. Calcutta was also filed which shows that the said company was in existence. A perusal of the balance sheet of these companies also indicates that ample funds were available with them ranging from Rs. 2 crores to more than Rs. 9 crores in the case of these four companies. Therefore, I am of the view that the genuineness of the share applicant, their creditworthiness and the transactions are established and there is no case for any addition u/s. 68 of the I. T. Act in this case. The Ld. AR also drew my attention to the judgment of Hon'ble Supreme Court in the case of CIT vs. Lovely Export Pvt. Ltd. 216 CTR 195 and decision of various High Courts regarding this issue whic....
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....r issue, relied upon decisions in Divine Leasing and Finance Ltd.,299 ITR 268(Del.),A-One Housing Complex Ltd. vs. ITO,299 ITR(AT) 327(Delhi),CIT vs. Electro Polychem Ltd.,294 ITR 661(Mad.), CIT vs. Illac Investment P Ltd.,287 ITR 135(Del.),Uma Polymers P Ltd. vs. DCIT,284 ITR1(AT)(Jodhpur), Shree Barkha Synthetics Ltd. vs. ACIT,283 ITR 377(Raj.), CIT vs. Down Town Hospital Pvt. Ltd.,267 ITR 439(Gau.),CIT vs. Sophia Finance Ltd.,205 ITR 98(Del.), and CIT vs. Gobi Textiles Ltd.,294 ITR 663(Mad.) and rejected a similar report of Addl. DIT(Inv.),Kolkatta in relation to shareholders M/s Bhandari Financial Services Pvt. Ltd., Hanuman Coke Plant Pvt. Ltd., Mira Finance Lease Pvt. Ltd., and Sahi Agency Shipping Pvt. Ltd..Accordingly, it was conclu....
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...., the provisions of s. 68 may be invoked". It is apparent that the Hon'ble Court had not reflected upon the question as to whether the burden of proof rested entirely on the assessee, and at which point, if any, this burden could justifiably be shifted to the AO. The Full Bench, in fact, clarified that they were not deciding as to whom and to what extent is the onus to show that an amount credited in the books of account is share capital and when does that onus stand discharged. This will depend on the facts of each case. Recently, Hon'ble Apex Court while affirming the order of the Hon'ble Delhi High Court in CIT Vs. Lovely Exports (Pvt. ) Ltd. & CIT Vs. Divine Leasing & Finance Ltd.,299 ITR 268(Del.) in 216 CTR (SC) 195 held t....