AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 1079
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....nting to Rs. 52,48,000/- imposed by the AO under section 271(1)(c) of the Act. 3. Brief facts of the case are that the assessee has filed its return of income on 30.10.2002 declaring total loss at Rs. 29,31,379/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the AO that the assessee's authorized share capital has been increased to Rs. 3.00 crores as against Rs. 1.00 crore. On further scrutiny, it revealed that the assessee has taken share application money from 273 applicants, out of that from 272 parties share application money was taken in cash. The AO has directed the assessee to furnish identity of the....
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....jarat High Court in case of Jalaram Oil Mills 3 Judgment of Hon'ble Gujarat High Court in case of Amrut Tubewell Co. 4 Order of Hon'ble IT AT, Ahmedabad in case of Manish Organics India Ltd. 5 'Order of Hon'ble IT AT, Ahmedabad in case of Bhagyodaya Group Co-op Cotton Sale, Ginning & Pressing Society Ltd. 6 Judgment of Hon'ble Supreme Court in case of Reliance Petroproducts (P.) Ltd. Copies of these decisions have been placed on record. 5. The ld.DR, on other hand relied upon orders of Revenue authorities. He contended that the assessee failed to give any explanation what to talk of plausible explanation. Hence, it is a fit case, where with the help of Explanation-1 of section 27....
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....ch person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income or such person as a result thereof shall, for the purposes of Clause (c) of this subsection, be deemed to represent the income in respect of which particulars have been concealed." 7. A bare perusal of this section would reveal that for visiting any assessee with the penalty, the Assessing Officer or the Learned CIT(Appeals) during the course of any proceedings before them should be satisfied that the assessee has; (i) concealed ....
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....essee failed to give any explanation with respect to any fact material to the computation of total income or by action of the Assessing Officer or the Learned CIT(Appeals) by giving a categorical finding to the effect that explanation given by the assessee is false. In the second situation, the deeming fiction would come to play by the failure of the assessee to substantiate his explanation in respect of any fact material to the computation of total income and in addition to this the assessee is not able to prove that such explanation was given bona fide and all the facts relating to the same and material to the computation of the total income have been disclosed by the assessee. These two situations provided in Explanation 1 appended to se....
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....f accounts in the form of share application money. 15. Our view is fortified by the fact that the alleged share applicants who are agriculturists have applied for the shares of an unlisted company from which they are not going to derive any benefit whatsoever in future by the appreciation in the market value of the shares. 16. In our considered opinion, in the context of the preponderance of probabilities, the impugned share application money is not genuine and the assessee has grossly failed in discharging the initial burden cast upon it by the provisions of Section 68 of the Act. We, therefore, decline to interfere with the findings of the First Appellate Authority. 17. Before parting, the ld. counsel for the as....
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....s dismissed. 9. The assessee has not given any explanation. It has just submitted that it has received share application money from 272 parties. It has given their names. But the addresses given by the assessee were found to be incorrect because notices were returned. Apart from that the assessee has not given any details. Monies have been taken in cash and not through banking channel. Therefore, neither it has proved the genuineness of the transaction nor credit-worthiness of the alleged applicants; rather to say their identities also doubtful. In such circumstances, it has to be construed that the explanation offered by the assessee has been proved as false by the AO. The ld.counsel for the assessee has relied upon above six judg....