TaxTMI 
TaxTMI 
2017 (3) TMI 1566
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....s qua the abovestated sole issue in tribunal. The assessee company manufactures iron & steel items like beams, channels, rounds and angles etc. It received promoter quota contribution of Rs. 1,07,35,900/- from 189 applicants in assessment year 1996-97. The Assessing Officer sought to know about details, confirmations, PANs, source of money received in abovestated share applications. The assessee appears to have produced photocopies of the said 189 applicants followed by confirmation letters, PANs as well as income tax assessment particulars pertaining to eighteen parties qua share capital of Rs. 60.43lacs. It further placed on record 26 applicants' confirmations involving share capital amount of Rs. 16,82,900/- without any proof of identity as well as genuineness/creditworthiness thereof. It however did not file any evidence of the remaining 145 parties involving share capital of Rs. 30,10,000/-. These parties' particulars revealed the following details: i) Cheques drawn on the Gujarat State Co.op. Bank Ltd., Ahmedabad Sr. No. Name Cheque No. date. Amount. 01 Ganapatbhai A Patel 689702 5.5.95 25000 At Kherva, Tal. Patadi, SNR 02 Vinodchand V. Patel ....
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.... State Bank of India Name Cheque No. Date Amt. Rs. Address Mansingh Jumbhai Solanki 271459 19.1.96 49000 P.O. Hadala T.A.Limbdi Surendranagar. ubhai Jembhai Solanki 271460 19.1.96 49000 P.O. Hadala Dist.A'bad Dhanduka. vantsig Khumansing 271461 19.1.96 49000 T.A. Dhanduka, Dist.A'bad P.O. Hadala. ansingh Jembhai Solanki 271462 19.1.96 28000 ----do----- ubhai Jembhai Solanki 271463 19.1.96 25000 T.A. Dhanduka, Dist.A'bad. bhaybhai L. Badaresh 562111 15.11.95 35000 Mohankunj Hatkeshwar Mahadev. bhubhai L. Patel 562112 15.11.95 15000 Mohankunj Soc. Hatkeshwar Mahadev. bhaybhai L. Badaresh 562113 15.11.95 20000 Mohankunj Soc. Khokra, A'bad. 270000 iii) Bank of Baroda Name Cheque No. Date Amt. Rs. Address Lipsinh J Makwan 242754 12.12.95 15000 At. Talodgam TA Pratij Dist. Himatnagar. aganbhai K. Patel 242755 12.12.95 40000 At. Talodgam TA Pratij Dist. Himatnagar. garambhai K Patel 242756 12.12.95 40000 At. Talodgam TA Pratij Dist. SK. jibhai N Patel 242757 12.12.95 45000 At. Vakrapur TA Pratij Dist. SK shrath N Raval 452984 20.10.95 17000 - rf. Sr. 11- alsingh Magansinh Rathod ....
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....ee categories of assessee's 189 share applicants. First one pertained to 18 share applicants involving a sum of Rs. 60.43lacs hereinabove whose all the relevant details stood duly filed. He accepted assessee's explanation since supported by relevant PAN and income tax assessment details. He however invoked Section 68 of the Act qua the remaining two categories of 171 share applicants i.e. the second category of 26 parties wherein the assessee had filed their confirmations only without any evidence or genuineness/creditworthiness. This followed the third category of the remaining 145 share applicants not even involving confirmations. The Assessing Officer reiterated his earlier observations to treat the corresponding share application amounts of Rs. 16,82,900/- & Rs. 30,10,000/-; totaling to Rs. 46,92,900/- as unexplained u/s.68 of the Act in assessment order dated 23.03.1999. 6. We now advert to latter assessment year 1997-98. The Assessing Officer added similar unexplained share application amount of Rs. 2,80,17,600/- by quoting assessee's failure in submitting confirmations even during the course of scrutiny. 7. The assessee preferred separate appeals. The CIT(A) disposed of th....
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.... 1557 & 1559/Ahd/2001 before this tribunal. A co-ordinate bench in its common order dated 15.02.2008 restored the issue back to the Assessing Officer on the ground that the assessee had submitted the relevant details only in course of proceedings before the CIT(A) for the first time so far as its paper book involving pages 1 to 178 was concerned. It accordingly directed the Assessing Officer to finalize afresh consequential assessments. 9. The assessee appears to have filed Tax Appeals nos. 2522 & 2523/2009 before hon'ble jurisdictional high court. The Assessing Officer in the mean time took up consequential proceedings. He again sought necessary details/evidence. The assessee's reply came on 15.09.2009 inter alia reiterating its stand in first round of proceedings right from CIT(A)'s order to tribunal's directions. It stated that the relevant details sought already formed part of record. The assessee again reiterated its earlier submissions on 08.11.2002 that relevant share applications details had been duly placed on record. It thereafter submitted the share holder list in question along with addresses and number of shares. The Assessing Officer asked it to reproduce at least 10....
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....d the order considering the said details. Hence the Tribunal has erred in making this observation and after making such observations, set aside the assessment. Normally the Court would not have interfered in the order setting aside the assessment. However, looking to the facts of the present case the order passed by the Tribunal is required to be set aside and the Tribunal is required to be directed to decide it afresh. However, looking to the subsequent development that has taken place after the Tribunal has passed the impugned order, the Court would not interfere in the order passed by the Tribunal as pursuant to the said order, the AO has already framed the assessment against which the Appellant assessee has filed appeals before the CIT(A) and those appeals are pending. 6. In light of the above facts, without interfering in the order passed by the Tribunal, we direct the CIT(A) to decide the Appeals which are pending before him against fresh assessment orders passed by the AO, in accordance with law and after considering the Apex Court's order passed in the case of Commissioner of Income Tax v. Steller Investment Ltd. 2001 (201) ITR 263 and Commissioner of Income Tax v. M/....
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....that the appellant has earned such huge income during the year in question to enable the company to invest such funds in the share capital in name of benamidars especially considering the fact that no business activity has been carried out by the company during the year. I am of the confirmed view that once the existence and identity of the shareholders is not in doubt, no addition on account of unexplained share capital could be made in the hands of a company. This view of mine is amply fortified by the decision of various courts of law as cited by the appellant in its written submission filed before me more particularly the decisions of full bench of Delhi High Court. In the case of Sofia Finance Ltd. Reported in 205 ITR 98 and the decision of the Hon'ble Supreme Court in the case of CIT vs. Stellar Investment Ltd. Reported in 164 CTR 287. Most respectfully following the decision of the Hon'ble Supreme Court in the case of CIT vs. Stellar Investment Ltd. (supra). In which it has been held by the Hon'ble Supreme Court while affirming the decision of the Delhi High Court in the case of same assessee that, inter-alia, even if the subscribers to the share capital of the c....
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....the creditors as directed by the higher appellate authorities. The AO has also not discussed and also not applied/discussed the decision of Apex Court in the case of CIT vs. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195, which has held that "Can the amount of share application money be regarded as undisclosed income under section 68 of the IT Act, 1961? We find no merits in the Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department, is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgment." 11.4. In view of the above facts and circumstances of the appellant's case, the order of the re-assessment, the relevant case laws on the subject, the directions of the Gujarat High Court and on the basis of the decisions of the Apex court in the cases of Commissioner of Income-tax Vs. Steller Investment Ltd, (2001) 251 ITR 263 and the Commissioner of Income-tax v. M/S. Lovely Export (Pvt) Limited passed by the Apex Court on 11-1-2008 in Special Leave to Appeal (C....
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....s stood very well proved. The dispute in the instant case rather pertains to the remaining 171 share applicants. It has come on record that the assessee has failed to file their relevant details in both rounds of assessments. Learned counsel representing assessee vehemently contends that the assessee had filed all relevant particulars before the assessing authority so as to discharge initial onus in order to prove identity and genuineness of its claim. We however find that this assertion is not supported from the case records. We repeat that 145 share applicants involving share capital of Rs. 30.10 lacs never saw any evidence at all. Remaining 26 applicants appears to have filed their confirmations whose veracity could never be proved at assessee's behest. We again wish to repeat at this stage that the Assessing Officer's strong doubt over the said share applicants to the effect that although they reside in different parts of state but their demand draft applications moved before the Surendranagar Cooperative bank disclosed a single day, date and branch followed by their order in defined sequence as extracted in preceding paragraph to be raising enough suspicion; has nowhere been r....