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2013 (11) TMI 840 - HC - Income TaxAddition u/s 69 and penalty u/s 271(1)(c) of the Income tax Act – Held that:- The revised return had been acted upon by the Assessing Authority and in fact, the loss of Rs. 13,87,540/- declared by the assessee in the revised return filed on 24.3.1992, had been accepted in toto. The bonafide of the assessee is therefore established because it was not able to produce the necessary documentary evidence for proving the capacity of the shareholders and depositors to the full extent within a short span of time as the assessment was getting barred by limitation. Even the depreciation of Rs. 24,62,390/- claimed in the revised return, had been accepted by the Assessing Officer. The share capital and the unsecured loans amounting to Rs. 12,23,100/- declared by the assessee in the revised return has also been accepted. Moreover, decision of Hon'ble Supreme Court in the case of Commissioner of Income Tax vs. Stellar Investments Ltd. [2000 (7) TMI 76 - SUPREME Court] and CIT vs. Lovely Exports (P) Ltd. 2008 (1) TMI 575 - SUPREME COURT OF INDIA], the subscription made by the various shareholders in the share capital of a company cannot be taxed at the hand of the company and can only be taxed at the hands of the shareholder under Section 69 of the Act. Failure of the assessee in proving the capacity of the various shareholders to invest in the share capital, could not have been a ground for initiating penalty proceedings – Deleted the penalty u/s 271(1)(c) of the Income tax act – Decided against the Revenue.
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