TaxTMI 
TaxTMI 
2017 (9) TMI 839
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....rn of income declaring a loss of Rs. 9,919/. The return was taken in scrutiny by the Assessing Officer who passed the order of assessment determining the total income of the assessee at Rs. 46.92 lakhs (rounded off) making addition of the same sum under section 68 of the Income Tax Act ("the Act" fort short) on account of unexplained cash credit in the form of share application money. The assessee carried the matter in appeal. After one round of remand, the Assessing Officer passed a fresh order reiterating the same position, upon which, once again the issue travelled before the higher authorities and thereafter, is before us in the present Tax Appeal. 5. The material on record would show that the Assessing Officer during the scrutiny assessment proceedings had noticed several infirmities in the allotment of shares of the company. He confronted the assessee with such material and called upon the assessee to supply confirmation from the share applicant, their PAN, source of money received in share applications etc. The Assessing Officer noted that the assessee filed ITR acknowledgment of 18 parties which constituted share capital of Rs. 60,43,000/. For the remaining parties, conf....
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.... Ankevaliya, 19 Chhaganbhai M. Patel 689720 5.5.95 25000 At Dudheraj, Wadhwan, SNR 20 Tribhuvan Patel 689721 5.5.95 25000 At Dudheraj, Wadhwan, SNR 21 Hargovindbhai C. Patel 689748 6.6.95 25000 At Kherva, Tal. Patadi, 22 Chamanbhai Pathak 689749 1 6.6.95 25000 At Kherva, Tal. Patadi, 23 Rameshbhai C. Patel 689750 16.6.95 25000 At Haripur, Tal Dhangadhra 24 Bhavna R. Pathak 689751 16.6.95 25000 At Haripur, Tal Dhangadhra 25 Dayaljibhai A. Patel 689770 28.6.95 25000 At Kherva, Tal. Patadi, 26 Manshukh A Patel 689771 28.6.95 25000 At Nana Ankevaliya,SNR 27 Mahadevbhai M. Patel 689772 2 8.6.95 25000 At Nana Ankevaliya,SNR 28 Popatbhai M. Patel 689773 28.6.95 25000 At Nana Ankevaliya,SNR 29 Ghanpatbhai Patel 689774 28.6.95 25000 At Nana Ankevaliya,SNR 30 Prahladbhai M. Patel 689775 28.6.95 25000 At Nana Ankevaliya,SNR 31 Baldevbhai G. Patel 689776 28.6.95 25000 At Nana Ankevaliya,SNR 32 Hargovindbhai C. Patel 689777 28.6.95 25000 At Nana A....
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....agwatiben Patel 958844 16.05.95 10000 refer Sr. 4 6 Madhuben Patle 958845 16.05.95 10000 62, Poonamnagar Bhalan Rd. Surat 7 Manoharbhai Jada 958846 16.05.95 10000 AT & PO Amrali TA. 8 Manoharbhai M Patel 958847 16.05.95 15000 64, Rangnagar Soc. Dist Surat 9 Naranbhai Patel 958848 16.05.95 10000 123000 Enquiries were conducted with the Surendra Nagar Dist Coop Bank Ltd Wadhwan City Branch regarding 32 applicants photocopies of slips of demand drafts were called for. On verification of the photocopies it is seen that : i) The demand drafts are taken by cash payments by various parties in the name of assessee company. ii) 20 demand drafts were not signed by the applicant where as writing in the applications is of one person. iii) 12 application slips are signed by the applicants who have applied for the shares, but the signature of the applicant in the bank slip defers with the signature in the application form. However, out of 12, 8 slips are signed by one person named Rameshbhai. Photocopies of these 12 share applicatio....
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....ing any enquiry as to the true nature and source of a sum credited in the account books even if it is credited as receipt of share application money. There mere fact that the (assessee) company chooses to show the receipt of the money as capital does not preclude the income tax officer from going into the question whether this is actually so. Where, therefore, an assessee company represents that it had issued shares on the receipt of share application money then the amount so received would be credited in the books of account of the company." Further assessee has not proved ingredients as decided by Calcutta High Court in the case of CIT vs. Precision Finance Pvt. Ltd (1994) 208 ITR 465." Therefore, it is clear that assessee has not discharged its onus to prove that share capital is genuine and correct. Subject to the above discussion, the unexplained credit in the form of share capital of Rs. 4692900 (1682900 + 3010000) are held as income chargeable to tax in the hands of the assessee company u/s. 68 of the IT Act during the year under consideration." 6. Matter then travelled before the CIT (Appeals) and thereafter, before the Tribunal. The Tribunal by the impugned ord....