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2015 (3) TMI 677 - ITAT DELHIBogus share capital - Addition u/s 68 on account of share application money - CIT(A) deleted the addition - Held that:- The assessee company had discharged the initial onus to prove the genuineness of the transaction along with identity of the investor and its creditworthiness cast upon it by furnishing details, PAN Nos., addresses and confirmations in the form of affidavits of share applicants/contributors. In the present case, when the summons issued to the alleged investors could not be complied with, without any further effort and verification, the AO proceeded to make an addition u/s 68 of the Act merely relying on the information received from the Investigation Wing of the department which is not a proper approach. From the assessment order, we observe that the assessee claimed to have received share application money of ₹ 1,01,77,000 during the year under consideration but the AO disputed the four transactions on the basis of information of Investigation Wing of the department. The AO issued summons u/s 131 of the Act to these four entities. The summon to M/s Samrendra Leathers Pvt. Ltd. was returned by postal authorities with the remark “Lock closed” and the summons u/s 131 of the Act to other three entities was received unserved with the common remark “no such person at the given address”. Thus respectfully taking note of decision of CIT vs Lovely Export (2008 (1) TMI 575 - SUPREME COURT OF INDIA) wherein held that if the share application money is received by the assessee company from alleged bogus shareholders whose names are given to the AO, then the department is free to proceed to reopen their individual assessment in accordance with law but no such exercise has been conducted by the AO in the instant case. Hence, we are unable to see any perversity, ambiguity or any other valid reason to interfere with the impugned order and we uphold the same. - Decided against revenue.
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