TaxTMI 
TaxTMI 
2017 (9) TMI 521
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....'Act'), dt. 31/12/2009, for the Assessment 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 ....
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....in ROC information are listed in column 6 & 7. On comparison following discrepancies 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.....
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....he explanation is in effect an in-built safeguard in section 68 protecting the interest of the assessee. It provides for an 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 info....
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....ddition by observing as under:- "9.1.4. I would just add the following further observations: * There is total mix-up of Names. * There 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, no....
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....ants and as the transactions were cheque transactions, the genuineness of the transactions is proved. He relied on the decision of the Hon'ble Supreme Court in the case of CIT vs. Lovely Exports 216 CTR 195. He further submitted 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 fo....
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.... dt. 28.06.2017 has held as follows:- "11. The second argument of the ld. Counsel for the assessee, is that the assessee has proved the identity and creditworthiness of the creditor company as well as the genuineness of the transactions. We are not able to agree with the same. A 10 rupees share has been issue at a premium of 990 rupees. On a question, the assessee has not even attempted to justify the amount of share premium. A perusal of the audited statement of accounts of these companies demonstrate that there is hardly any income was disclosed or any expenditure worth mentioning was claimed. There is no activity whatsoever in these companies. The Reserve Bank of India, the Institute of Chartered Accountants of India, and certai....