TaxTMI 
TaxTMI 
2011 (7) TMI 1285
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.... on account of 'unexplained cash credit' u/s. 68 has been deleted, there remains no justification for sustaining this addition." 3. In this case Assessing Officer noted that there was information that assessee has received amount from entry operators as under:- Sl.No. Amount Date of Entry Name of the Entry Giver 1 600000/- 15/7/03 Globe Tech Solutions Pvt. Ltd. 2 900000/- -do- Kohinoor Oil Mills Ltd. 3 600000/- 17/7/03 Rapid Impex Pvt. Ltd. 4 1000000/- 27/12/03 Niti Housing Development & Fin. Cor. Ltd. 5 500000/- 12/7/03 Shattarchi Fin & Leasing 6 1000000/- 12/7/03 Polo Leasingh & Finance Pvt. Ltd. 7 800000/- 12/7/03 Satwant Singh Sodhi Const. 8 700000/- 12/7/03 Saheb Enterprises 9 800000/- 15/7/03 Labh Tronics Overseas Pvt. Ltd. 10 800000/- 15/7/03 Shashi Sales and Marketing Pvt. Ltd. 11 500000/- 15/7/03 Fair 'N' Square Exports Pvt. Ltd. 12 500000/- 15/7/03 Dignity Finvest Pvt Ltd. 13 800000/- 17/7/03 Tashi Contractors Pvt. Ltd. 14 600000/- 17/7/03 VPS Values & Tubes P Ltd. 15 800000/- 17/7/0....
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....e application form which contained names, addresses, PAN, bank details, confirmations of the investors, copy of the annual returns and returns of allotment filed with the Registrar of Companies, etc. and hence, in view of various judicial pronouncements, no addition can be made in appellant's hand. In the case of Addl. C.I.T. vs. Hanuman Pd. Aggarwal 151 ITR 151 (Patna) it was held that assessee having furnished the correct name and address of the creditor, having confirmatory letter from the creditor and all materials show prima facie not only identity of the creditor but also the genuineness of the transaction, no adverse inference can be drawn. Reference can also be made to the judgement of Hon'ble Apex Court in the case of Stellar Investment Ltd. (2001) 251 ITR 263 (SC), wherein it was held that even if the subscribers to the increased share capital of assessee company were not genuine, the amount could not be regarded as undisclosed income of the assessee company. The above view point of the Hon'ble Apex court has also been expressed by Jurisdictional Delhi High Court in the case of Divine Leasing and Finance Ltd. (2008) 299 ITR 268 (Del). A One Housing Complex Ltd. vs. ITO 11....
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....e hands of the investor but it certainly could not be treated as undisclosed income of the assessee. The appeal filed against the said decision, was dismissed by the Hon'ble Supreme Court in C.C. 12860/2007 dated 8.1.2008. As no adverse/incriminating material has been gathered by the Assessing Officer during the course of the assessment proceedings hence, I do not see any justification on the part of the Assessing Officer to make any addition on account of share application money received from different parties especially when the Assessing Officer has been provided with PAN and other documentary evidences to prove the identity of the share subscribers. It has been held in plethora of judicial pronouncements that if the information or the source of that information is collected at the back of the assessee and the same is not confronted to the assessee or the assessee is not given reasonable opportunity to rebut the same, then the said information/material cannot be used against the assessee. Reliance in this regard is placed on the following judicial pronouncements given by Hon'ble Apex court and jurisdiction High Court :- * C. Vasantlal & Co. v. C.I.T. (1962) 45 ....
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....nces, we find that the order of the Ld. Commissioner of Income Tax (Appeals) is quite reasonable. 6.1 In this regard, we place reliance of the Hon'ble Apex Court decision delivered in the case of CIT Vs. Lovely Exports 216 CTR 195. In this case it was held that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the Department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of the assessee. 6.2 We further place reliance upon the decision of the Hon'ble Jurisdictional High Court in the case of C.I.T. v Gourdin Herbals India Ltd. in ITA No. 665/2009 vide order dated 17.4.2009 wherein it has been held as under:- "Three companies, viz., M/s Kuberco Sales Pvt. Ltd., M/s Garg Finvest Pvt. And M/s Mafico Leasing and Consultants Pvt. Ltd. had subscribed to the share capital issued by the assessee. The Assessing Officer had some doubts about the source of the investment made by those three companies and therefore, made certain inquiries. In response, the assessee produced the copy of the bank acc....
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.... judgement of the Supreme Court in Lovely Exports (P) Ltd. (Supra) would cover the field with regard to interpretation of section 68 of the Act. 8. In any manner, the onus of proof is not a static one. Though in section 68 proceedings, the initial burden of proof lies on the assessee yet once he proves the identity of the creditors/share applicants by either furnishing their PAN number or income tax assessment number and shows the genuineness of transaction by showing money/his books either by account payee cheque or by draft or by any other mode, then the onus of proof would shift to the revenue. Just because the creditors/share applicants could not be found at the address given, it would not give the revenue the right to invoke section 68. One must not lose sight of the fact that it is the revenue which has all the power and wherewithal to trace any person. Moreover, it is settled law that the assessee need not to prove the source of source." 6.4 On examining the present case on the anvil of the above said Hon'ble Apex Court decision and two Hon'ble Jurisdictional High Court decisions , we do not find any infirmity or illegality in the order of the Ld. Commissioner of....
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....Creations Pvt. Ltd., there is a opening balance of Rs. 14,00,000/- as on 1.4.2004 against which the appellant company issued share capital worth Rs. 1,40,000/- on 25.5.2004 and the balance amount of Rs. 12,60,000/- is taken to share premium account. In the case of M/s MV Marketing Pvt. Ltd, the opening balance is Rs. 14,00,000/- with similar details existing for issue of share capital and appropriation to share premium account as in the case of M/s Ethnic Creations Pvt. Ltd. and M/s Arun Finvest Pvt. Ltd. In the case of M/s Salwan Developers and Promoters Pvt. Ltd., the appellant received Rs. 14,00,000/- by cheque no. 792585 and 792586 dated 4.11.2003 which means that the amount has been received during the period relevant to assessment year 2004-05 and not during the year under consideration. In the case of M/s Niti Housing Finance & Dev. Corpn. Ltd., M/s RSG Marking Pvt Ltd. and M/s Jaishiv Fabricators Pvt. Ltd, the opening balances as on 1.4.2004 are as Rs. 60,00,000/-, Rs. 21,00,000/- and Rs. 40,00,000/- respectively. As the amounts in all the above mentioned seven parties have been received during the previous year relevant to assessment year 2004-05 hence, no addition on acco....