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2014 (2) TMI 1376 - ITAT MUMBAICondonation of delay - delay of 183 days in filing the present appeal by the assessee - HELD THAT:- Assessee has explained a reasonable cause for not filing the appeal within the period of limitation as there was an inadvertent mistake at the office of the Chartered Accountant of the assessee as explained in the affidavit. It is always a question as to whether the explanation and reason for delay was bonafide or was merely a device to cover an ulterior purpose or an underhand attempt to save the limitation. When it is brought on record that the party has not acted in malafide but the reasons explained are factually correct, then the court should be liberal in construing the sufficient cause and should lean in favour of such party. Reasons explained by the assessee are not malafide or a device to cover the ulterior purpose as there is nothing on record to infer that by filing a belated appeal the assessee could have achieved an ulterior purpose. Accordingly, we are satisfied with the reasons explained by the assessee that the assessee was having sufficient cause for not filing the appeal within the period of limitation. Hence, we condone the delay of 183 days in filing the present appeal. Unexplained cash credit u/s 68 - Revenue doubted the source of the share application money - whether transactions of allotment of share is a sham transaction? - HELD THAT:- Disallowance of the claim of the assessee and addition made by the AO under Section 68 is purely based on assumption, guess work without substantiated by any evidence or material. This is not a case of bogus shareholders as all these parties are the company, which are in existence and subjected to Income Tax as the assessee has produced the relevant evidence. Therefore, when the assessee has produced all the relevant evidences, and if the department has doubted the source of the share application money, then it is free to take necessary action in respect of these parties In the case of CIT Vs. Lovely Exports Pvt. Ltd. [2008 (1) TMI 575 - SC ORDER] has 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 it cannot be regarded as undisclosed income of the assessee company. There is nothing on record to show that these transactions of allotment of share is a sham transaction, then the department cannot treat the said share capital money as undisclosed income of the assessee. - Decided in favour of assessee.
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