2010 (1) TMI 1297

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....in deleting the additions of Rs. 50,00,000/- made by the AO u/s. 68 of the I.T. Act 1961." 3. During the year under consideration, the assessee company has shown share application money of Rs. 50 lacs received from Shri Sujit Acharya. Confirmation from the said person was filed before the AO. As per this confirmation letter the said shareholder, who is a director of the assessee company, has confirmed the transaction by stating that sum of Rs. 36 lacs and 14 lacs were paid by him to the company through demand draft on 16.07.2005 and 23.07.2005. The AO then issued summons to the Director but same could no be served as the Director was not available. The assessee submitted before the AO that the director had gone on foreign trip to China a....

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....ty of the party. He is a director of the company. The PAN number has also been checked on the computer system of department and it shows the jurisdiction of Sh. Sujit Acharya with ITO ward 23(4) New Delhi. It is also seen that the signature of Sh. Sujit Acharya on various documents do tally with each other. Same signatures appear on the confirmation letter in which he has confirmed having paid Rs. 50 lacs to the appellant company. It is not in dispute that the payment has been made as share application money in lieu of which two share certificates allotting total 50,000 share of Rs. 100 each were issued to him on 1/2/07. The ratio of Supreme Court decision in the case of Lovely Exports is very clear and has not been reconsidered or reviewed....

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....The CIT(A) has also made his own enquiry and found that PAN has been allotted to Shri Sujit Acharya having jurisdiction with Income Tax Officer, Ward - 23(4), New Delhi. The CIT(A) has also compared the signature of Shri Sujit Acharya on various documents and found that the signature were tallied with each other. It is also not in dispute that the shares were allotted to him on 01.02.2007. In the light of these facts, the CIT(A) has deleted the addition by applying the ratio of decision of Hon'ble Supreme Court in the case of CIT vs. Lovely Exports 216 CTR 195. It is also pertinent to note that it is not the case where certain investigation have been made by the department where from it has been revealed that this transaction of payment of ....

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....ted before the Assessing Officer to enable him to examine the documents submitted before the CIT(A). Instead the Assessing Officer kept on insisting the production of these share applicants by the assessee and went on to make the addition. This action of the Assessing Officer is not justified on the anvil of Hon'ble Apex Court decision in the case of CIT vs. Orrisa Corporation Pvt. Ltd. 159 ITR 78 wherein it was held that in case the creditor does not appear in response to summon issued under section 131, no adverse inference can be drawn. Further, we find that the assessee had already submitted the names and addresses and IT details of the share applicants and under these circumstances the decision if the Hon'ble Apex Court delivered in th....