TMI Blog2014 (8) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... blished the nature and source of the sum and discharged the onus that lies on it in terms of Section 68 of the Act - When the nature and source of the amount so invested is known, it cannot be said to be undisclosed income - the addition of such subscriptions as unexplained credit under Section 68 of the Act is unwarranted – Decided against Revenue. - T. C. (A). No. 262 of 2014 - - - Dated:- 12-8-2014 - R. Sudhakar And G. M. Akbar Ali,JJ. For the Appellant : Mr. T. R. Senthilkumar Senior Standing Counsel JUDGMENT (Delivered by R. Sudhakar, J.) This appeal is filed by the Revenue challenging the order of the Income Tax Appellate Tribunal Chennai 'C' Bench, dated 8.10.2010, made in ITA No.683/Mds/2010 for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons made by the AR of the appellant. There are basically two issues and one issue is the addition on account of share application money received by the appellant company. The assessing officer had called for the confirmations from the share applicants and they had replied. The applicants were companies registered with ROC. The assessing officer had also called for their IT assessment details and the same were also provided by the applicant companies. The assessing officer rejected these confirmations and added all these contributions as unexplained credit u/s 68 of the IT Act. 5.1. Aggrieved by this, the appellant had stated that the share applicants were registered companies and that they had duly furnished the confirmations along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax v. Lovely Exports (p) Ltd., [2008] 216 CTR 195 (SC). In paragraph (6) of the order, the Tribunal has held as under: 6. We have perused the orders and considered the rival submissions. Assessee had received share application money and share premium money totaling to ₹ 2,20,00,000/- from four parties which were all limited companies. Enquiries were made and replies were also received from the said four companies. There is no case for Revenue that the parties had denied, having given the share application money and share premium money. No doubt, ld. D.R. has strongly relied on the decision of the Hon'ble Delhi High Court in the case of Sophia Finance Ltd. (supra). In our opinion, the question has been clearly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year. 5. A bare reading of Section 68 of the Act makes it clear that in a case where any sum is found credited in the books of account and the assessee has not given satisfactory explanation in respect of the same, the Assessing Officer can treat the same as undisclosed income and add it to the income of the assessee. All that the said provision contemplates is that the assessee has to give satisfactory explanation about the nature and source of such sum found credited in the books of account. 6. From the facts as enumerated above, we are of the view that the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal. That apart, the decision of the Calcutta High Court in Commissioner of Income Tax v. Ruby Traders and Exporters Ltd., [2003] 263 ITR 300, relied upon by the learned Senior Standing Counsel for the Revenue, also does not support the case of the Revenue, as all that the assessee is required to establish is the nature and source of the subscriber, the creditworthiness and genuineness of the transaction. That proof has already been submitted by the assessee and it has discharged its burden in terms of Section 68 of the Act. It is always open to the department to proceed against such investors, if so advised, in view of the decision in Lovely Exports (p) Ltd. case, referred supra. 9. Resultantly, we find no merits in the appeal. He ..... X X X X Extracts X X X X X X X X Extracts X X X X
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