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2011 (1) TMI 1359 - ITAT JAIPURAddition u/s 68 - Accommodation entries by way of bogus loans from entities - HELD THAT:- We find that no addition can be made in the hands of the assessee company on account of share application money received. The assessee has filed necessary details for the purpose of proving that it had received actual share application money and the shares have been allotted. The main basis of the Department for making the addition is blank transfer certificates duly signed by the directors which were found from the possession of the manager of the assessee company, in our view, is not a sound basis as by finding blank transfer certificates does not disprove the reality. Reality is that assessee company has received share application money through account payee cheque. Shares have been allotted to the respective companies. The assessee company is showing the shareholders in its balance sheet and these companies are also showing the assets in their balance sheet in the shape of shares in the assessee company. All these companies are assessed to tax and, therefore, in our considered view, the addition sustained by learned CIT(A) is not justified. In the decision of CIT vs. Steller Investment Ltd.[1991 (4) TMI 100 - DELHI HIGH COURT], which has been affirmed by Hon’ble SC in CIT vs. Steller Investment Ltd. [2000 (7) TMI 76 - SC ORDER]. It has been clearly held that s. 68 shall not apply on the share application money. It was also held that If the Department wants to proceed to unearth the truth about source of funds, then they can reopen the cases of the above three companies from whom the share application money have been received and shares have already been allotted to them. In view of these facts and circumstances, we delete the entire addition for asst. yr. 2005-06. Appeal for asst. yr. 2005-06 - HELD THAT:- In this case also no cross-examination was allowed to the assessee. Therefore, adverse inference cannot be drawn only on the statement of Shri Mukesh Choksi. We further noted that all other necessary details have been filed before AO. Amounts were received through account payee cheque. Both the companies are assessed to tax in Mumbai. Confirmation along with copies of share certificate bank statement memorandum of articles copy of share application money audited balance sheet and P&L a/c of these parties were filed. These are similar details as were filed in case of three other companies for asst. yr. 2005-06. We have already disposed of the appeal for asst. yr. 2005-06 whereby we have held that the assessee has discharged its onus by filing necessary details. we cancel the entire addition made and confirmed by the lower authorities here also. In the result, appeals of the assessee are allowed.
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