TaxTMI 
TaxTMI 
2018 (9) TMI 1753
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....pt ground No.2 are related to the addition made by the AO relating to the share application money u/s 68 of the Income Tax Act, 1961 (hereinafter called as 'Act'). 3. Ground No.2 is related to the admission of additional evidence for not giving opportunity to the AO as required under Rule 46A of Income Tax Rules. During the appeal hearing, for a query from the bench, the Ld.DR submitted that no additional evidence was furnished by the assessee before the Ld.CIT(A), hence we dismiss ground No.2 as infructuous. 4. During the assessment proceedings for the assessment year 2012-13, the Assessing Officer (AO) found that the assessee had accepted the share application money of Rs. 9,30,77,319/- as per balance sheet dated 31.03.2012. On veri....
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....bserving that the share application money was allotted to the respective shareholders and placed reliance on the decision of Hon'ble Supreme Court in the case of CIT Vs. Lovely Explorts Pvt.Ltd. [216 CTR 195] and further held that the share application money cannot be taxed in the hands of the company and the AO is free to assess the same in the hands of the individuals. 6. Aggrieved by the order of the Ld.CIT(A), the department carried the matter to the Tribunal. During the appeal hearing, the Ld.DR submitted that scrutiny of the share applications and the confirmations reveals that there was no clear postal address and the assessee has not furnished details requisitioned by the AO. Since the assessee has failed to furnish the details i....
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.... submitted that in the instant case the assessee has furnished the copies of share applications and the confirmations as requisitioned by the Ld.AO. Share applicants are having sufficient means though they are agriculturists, they are having sufficient land holdings to explain the source of the investment made by the share applicants. All the share holders are residing in and around Nuzvid and nearby places. The assessee has furnished the details and without examining the details given by the assessee, the AO made the addition drawing adverse inference from the confirmations furnished by the assessee. Since the assessee has established the identity, credit worthiness and had allotted the shares as well as issued the share certificates the b....
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.... of Form No.2 before the Registrar of Companies and confirmed the allotment of shares. The copy of Form No.2 was also furnished before the Ld.CIT(A). During the assessment proceedings, the AO directed the assessee to submit the share applications as well as the confirmations and the same was furnished by the assessee. Though the AO stated that the details furnished on 24.03.2015, there was no material to show that the AO had called for the said details earlier which the assessee has not complied with. Therefore, the submission of details on 24.03.2015 cannot be taken as ground for not making the enquiries which required to be made by the AO with regard to the genuineness, credit worthiness and identity of the share applicants. Since the ass....
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....try operators, the AO initiated proceedings u/s 147 of the Act. The notices sent to the company were returned unserved and subsequently, the notices were served by affixture at the last known address. The assessee did not appear in response to the notices issued and the AO issued show cause notice u/s 144 r.w.s. 147 which was sent through speed post, but was returned unserved with a remark, no such firm. The AO located the address of the Chartered Accountant of the assessee company and the notice was served on CA and made known the representative that the assessment was reopened for the purpose of verification of the share capital received through entry operators. There was no compliance from the assessee company, therefore, the AO passed t....
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....egation that the share application money received was in fact relating to the accommodation entries. Therefore, the case law relied upon by the Ld.DR in this case is also distinguishable and has no application in the assessee's case. In the case of CIT Vs. Trinetra Comemrce & Trade (P) Ltd of Hon'ble High Court of Kolkata, the AO had issued summons to the shareholders and none of them appeared before the AO, the issue in this case also relating to the accommodation entries and the facts are distinguishable as discussed. Therefore, the case law relied upon by the Ld.DR has no application in the assessee's case. The facts of the case law relied upon by the Ld.DR in the case of Trinetra Comemrce & Trade (P) Ltd. is also distinguishable from th....