2016 (5) TMI 1599

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....re that the AO made addition of share capital of Rs.63.40 lacs and share capital premium of rs.96,00,000/- received by assessee from different share applicants as unexplained cash credit u/s. 68 of the Act. The assessee company during the year under consideration issued 634000 equity shares of Rs. 10/- each at a premium of Rs.15/- each. Accordingly, there was increase in share capital at Rs.63.40 lacs and share premium of Rs.95.10 lacs. During the course of assessment proceedings, the assessee filed details of share applicants i.e. identity of the applicants, share application money was received through account payee cheques and all the share applicants are private limited companies. The copies of incorporation and other details are verifiable from the applicants and their directors and also on official website of the Ministry of Corporate Affairs, which appears in www.mca.gov.in and assessee filed the same in the paper book at paged 23 to 51. The assessee also filed details of income tax particulars of these applicants having PAN and jurisdiction details. The assessee before the AO as well as before CIT(A) claimed that in such circumstances the transaction is genuine for the reaso....

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....f the assessment proceedings and the list now furnished as part of the Form-2, it is found that the assessee wrongly mentioned certain concerns, extra, in the list furnished earlier in course of the assessment proceedings as 'M/s Dheraj Textile (P) Ltd.' for 40000 shares and 'M/s JP Enterprise (P) Ltd..' for 60000 shares. Whereas, such companies do not exists and which are clarified to be read as 'Dherar Textile (P) Ltd .' & 'M/s JPS Enterprise (P) Ltd. instead. Further, there is no 'M/S Gagan Agency (P) Ltd.' claimed to have had applied 20000 Nos. of shares, it should be 'M/s Gunjan Agency (P) Lto.,' To clarify the following out of the above are the actual and existing- * 'M/s Dherar Textile (P) Ltd. ' * M/s Gunjan Agency (P) Ltd .. * M/s JPS Enterprises (P) Ltd. The assessee committed yet another such typographical mistake in respect of mentioning a concern namely 'Rewanel Distributors P Ltd.' in the paper book, even whereas, as per Form-2 the concern is 'Reward Distributors P Ltd. ' The discrepancies as reported earlier in my first report in terms of Number o....

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....credit, in view of the factual remand report of the A.O., wherein it has been accepted by the A.O. that share application money appears to be correct." 4. We find that the assessee has received share application money through account payee cheques and through normal banking channels. It is not the case of the revenue that the share application was not made from the bank account of the applicant companies and the share applicants were also produced before the AO. It is also not the case of the revenue that the shares were allotted to the subscribers are matter of records of ROC and confirmed by annual return and return of allotment as filed with ROC but the AO has not made any verification with respect to bank vis-a-vis respective companies nor has been called for any records of the respective companies. Even the AO has accepted the genuineness of these companies and receipt of share application money as well as share premium. In such circumstances, we are of the view that this is a genuine share application money and CIT(A) has rightly deleted the addition basing his decision on remand report of the AO. We confirm the order of CIT(A). 5. The next issue which is inter-connecte....

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....shed, the amount consolidated on different date do matches with the sales ledger as was already furnished in course of the assessment proceedings, as is observed. The cash withdrawal from the said bank A/C is however evident from the statement of the Bank A/C concerned of a total amount of Rs. 63,84,000/-, there is no dispute. The Date(s) of deposit and date(s) of cash withdrawn from the bank and date(s) of cash sale do support the source, as apparent in support of the cash deposits as mentioned and listed in the assessment order for a total amount at Rs.75,05,400/-. The value of the opening stock as on 01.04.2005 was shown at Rs.64,40,667/-. The assessee again produced the concerned ledger of the stocks, purchases in support." We find that the CIT(A) deleted the addition by observing in para 6.4 as under: "I have gone through the assessment order, detailed submissions of the appellant and the remand report submitted by the A.O. The A.O. has made the addition of Rs.75,05,400/- u/s. 68 of the Act as undisclosed source in respect of cash deposit into bank. In the remand report, the A.O. has submitted that the assessee has furnished the copy of the ledger A/C conc....