2017 (9) TMI 521

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....nt Year 2007-08. 2. The assessee is a company and is engaged in the business of distribution of transformers. It filed its return of income on 30/10/2007, declaring income of Rs. 29,56,766/-. The Assessing Officer completed the assessment u/s 143(3) on 31/12/2009, computing the total income at Rs. 3,71,57,100/-. While doing so, he made an addition of Rs. 1,30,00,000/-, on account of unexplained share application money. The findings of the Assessing Officer are extracted for ready reference:- Share Application Money Examination of Balance Sheet reveals that the assessee has received share application money on premium of Rs. 40/- totaling to worth Rs. 1.25 crore. As such the assessee was asked to submit detail as per questionnaire enclose....

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....crepancies are noted: 1) The premium amount charged as per ledger a/c. is Rs. 40/- whereas as per information submitted to ROC it is Rs. 10/- only. 2) In some cases i.e. Baliwal Finvest pvt. Ltd. 50,000 shares have been allotted for Rs. 5,00,000/- as per ledger a/c. i.e. without charging any premium. 3) In the case of Venus Construction 5,00,000 shares have been allotted for Rs. 5,00,000/- i.e. at the cost of Re. 1/- each share. 4) As per ledger a/c. Rajesh Vinimay and Vyapaar pvt. Ltd. has invested Rs. 20,00,000/- for 40,000 shares but as per ROC the said company has invested only Rs. 15,00,000/- for 75,000 shares. 5) M/s. Baliwal Finvest Pvt. Ltd. has invested Rs. 5,00,000/- for 50,000 shares as per ledger a/c. but as per R....

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....n opportunity to the assessee to explain the nature and source of the fund. Once it is explained, it is incumbent on the A.O. to consider the same and form an opinion whether the explanation is satisfactory or not. Duty of A.O. if the conclusion is adverse: If the conclusion is adverse wholly or in a part to the interest of the assessee, it is incumbent on the A.O. to intimate or inform the conclusion arrived at the assessee. When such information or intimation is received by the assessee, the onus shifts on the assessee. He may furnish further explanation or information to support it contention. If further information or materials are furnished, the A.O. is bound to examine the same and form his final opinion and pass an appropriate ord....

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.... is total mix-up of amounts - of subscription application as also premium. * The premium at Rs. 40/- compared to the share face value at Rs. 10/- only, and compared to the past record of the company is irrationally disproportionate. * Details/Names as per the Leger do not match with the 'details/names' filed with the RoC. * Filing with the RoC is mere routine paper-work compliance only. It does not grant authenticity and reality. * Like-wise merely getting PAN is mere routine only. It does not certify that the PAN holder is a genuine tax-payer, nor on the credentials. * PAN and CIN etc, are mere elementary and can be misused/masqueraded. 9.1.5. Section 68 of the Act requires that the 'nature' and 'source' be explained, and....

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....tted that in case the ITAT requires any further evidence, on this issue, the matter may be remanded to the Assessing Officer for enabling the assessee to fill in the gaps on evidences and prove its case to the satisfaction of the authorities. 7. The ld. DR, on the other hand, opposed the contentions of the assessee and submitted that a remand report was called for by the ld. CIT(A) and the assessee did not submit the same. He pointed out that the finding of the ld. CIT(A) that the premium amount of Rs. 40/- charged for the shares for face value of Rs. 10/- is irrationally disproportionate. He relied on the order of the ld. CIT(A) and submitted that the assessee is not offering any explanation on the same. 8. After hearing the rival submis....