TMI Blog2012 (3) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Year 2004-05 are as under:- 1. On the facts and circumstances of the case, Ld. CIT (A) erred in law as well as on merits in deleting the addition of ₹ 21,50,000/- made by the A.O. u/s 68, as the assessee had failed to substantiate genuinety of share application money transaction. 2. On the facts and circumstances of the case, Ld. CIT (A) erred in law as well as on merits in accepting the additional evidence in contravention to Rule 46A of IT Rule, 1962 without affording any opportunity to the department for examination of the same. 3. The appellant craves to amend, modify, alter, add or forego any ground of appeal at any time before or during the hearing of this appeal. 1.2. The grounds of appeal in all the years are same except difference in figures. The figures for other years are as under:- Assessment Year 2002-03 ₹ 1,00,000/- Assessment Year 2003-04 ₹ 43,00,000/- 1.3. The grounds of Cross Objections are identical and read as under:- That on the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals)-XI, New Delhi erred in holding that the reassessment proceedings initiated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act and to pay the fee as per prescribed rate. He also noted the fact that there is no specific bar in the provision to receive share application money more than the authorized capital though a company may not be permitted to issue the shares in excess of authorized capital. He also found that during all these three years share application money received by the assessee remained as it is as no allotment of share was made. However, on 31st March, 2007, the said resolution was passed by the Board of Directors for increasing the authorized capital from ₹ 10 lac to ₹ 1 crore and on the same date 65500 shares were allotted to the share applicant (associate concern of the assessee) in lieu of the share application money received earlier and the application for allotment of additional shares was also filed to RoC in Form No.2. Thus, he held that it was in the nature of share application money on which Section 2 (22)(e) was not applicable. 4. On merits, learned CIT (A) found that Section 68 could not be invoked as there is no doubt about the source of receipt of money. The share applicant is a group company itself and the amount is duly reflected in the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payer company, therefore, Section 2 (22)(e) could not be applied in view of aforementioned Special Bench decision. He submitted that Hon ble Delhi High Court has confirmed the view taken by the Special Bench in the case of Bhaumik Colours Pvt. Ltd. (supra) and he in this regard referred to the decision of Hon ble Delhi High Court in the case of CIT vs. Ankitech (P) Ltd. 242 CTR 129 (Del). He submitted that otherwise also this amount cannot be considered to be dividend as it was in the shape of share application money and learned CIT (A) has rightly held so. 9. He further submitted that none of the documents considered by learned CIT (A) for deleting the addition on merit can constitute additional evidence as all these documents were duly filed before the Assessing Officer and this fact is recorded in para 3.1 of the order of the CIT (A). Therefore, he pleaded that there is no force in the claim of the department that any additional evidence was furnished by the assessee before the CIT (A). He carried us through the paper book in which the evidence in the shape of bank account of the assessee company and share applicant company are filed along with acknowledgement of copies of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of the share application money received by the appellant from SOPL, copy of confirmation letter, bank statement, return acknowledgement of SOPL were filed before the A.O. The balance sheet of SOPL was also filed before the A.O. to show that the amount paid to the appellant company was reflected by SOPL under the head Loans and advances (asset) as share application money pending allotment of shares. Copy of annual return from ROC was also submitted to show that share application money received from SOPL shares were allotted in subsequent years. In view of this the appellant company had discharged its onus to prove the identity and credit worthiness of the party that is SOPL and also genuineness of transaction as the payment was received through account payee cheque duly reflected in the bank statement. In view of this the A.O. was not justified in treating the amount received from SOPL as unexplained and added u/s 68 of the IT Act. It was stated that Section 2 (22)(e) was not applicable to the appellant s case because the amount received was share application money and not in the nature of loans advances received. Therefore the addition made by the A.O. in all the three yea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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