TaxTMI 
TaxTMI 
2016 (10) TMI 974
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....llowed the appeal preferred by the assessee. The appeal was admitted on the following question of law : "Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal is correct in deleting addition of Rs. 1,06,94,471/- under section 68 of the Income Tax Act, 1961, in the light of the decision of the Hon'ble Calcutta High Court in case of Hindustan Tea Trading Co. Ltd. vs. CIT 263 ITR 289, as the assessee could not prove the identity and creditworthiness of the alleged share subscribers and the genuineness of the share subscriptions ?" The facts and circumstances of the case, briefly stated, are as follows. The original assessment was made on 23rd March, 2000 adding a sum of Rs. 1,06,90,000/-. In an a....
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....edit of amount by way of share application money. We order accordingly." In pursuance thereto, the assessing officer undertook the exercise once again and disposed of the matter by his order dated 27th February, 2004. The Assessing Officer noticed the following pieces of evidence : (a) There were 40 share applicants. All of them were issued summons under section 131 of the I.T.Act. Except for Mahabir Prasad Surulia and Gobardhan Das Surulia, the rest of the share applicants were not found at the address provided by the assessee. (b) The assessee was informed that the share applicants were not found. The assessee was also requested to produce the share applicants to establish the genuineness of the transaction. The assessee failed to do....
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....o Neither of the share application forms contain any Permanent Account Number. On the basis of the aforesaid evidence, the assessing officer concluded that "there is no existence of these share applicants who jointly provided the entire share application money of Rs. 1,06,90,000/-." The assessing officer, therefore, made an addition of a sum of Rs. 1,06,90,000/- under section 68 of the I.T.Act. In an appeal by the assessee, the CIT(Appeal) upheld the order passed by the assessing officer. In a further appeal, the learned Tribunal tried to justify the order dated 28th January, 2003 which was not required because that would appear from the order remanding the matter. The justification was offered only for the purpose of establishin....
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....pinion, the sustenance of the additions in the hands of the assessee companies would amount to double additions. Reliance on the decision in the case of Hindustan Tea Trading Co. Ltd.'s case (supra) by the A.O. and the ld.D.R. does not help the case of the department. In the said case before the Hon'ble Calcutta High Court, the issue was whether where the creditworthiness of the shareholders and the genuineness of investment is not established, can the share capital be added back ? Here, the issue is quite different. In the instant case, the department has added back the total share capital of 117 companies floated by Sri K.P.Kedia including the share capital of the assessee companies, in the hands of Sri K.P.Kedia which has reached finalit....
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....unts then it would attract addition to his income under section 69 of the I.T.Act. The addition to the income of Sri K.P.Kedia does not, in the least, diminish the liability of the assessee company under section 68. These are two different causes of action leading to addition against the income of two different persons. There is as such no question of any double taxation. It may also be pointed out that the learned Tribunal failed to notice that the Settlement Commission in its order dated 16th March, 2006 has recorded that the case of K. P. Kedia was that he filed return on 21st August, 2000 of income reflecting undisclosed income of Rs. 7.10 crores under compulsion. We are sorry to say that the learned Tribunal has mixed up the matters. ....