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2018 (10) TMI 1633 - AT - Income TaxReopening of assessment - not to disclose the transaction of 1 crore receiving share application money Held that:- From the reasons recorded, which are reproduced in Para 2 of the assessment order. Nowhere clarifies that what was the failure of the assessee not to disclose this transaction of 1 crore receiving share application money from Alka Diamond Industries Ltd. It is a fact that the assessee has disclosed the transaction in the return of income accompanying audited accounts including balance sheet which depicts receipt of share application money of ₹ 1 crore from Alka Diamond Industries Ltd. Even otherwise the assessee before the AO during the reassessment proceedings, in response to notice under section 133(6) of the Act, Alka Industries Ltd. submitted details of Income Tax return, copy of ledger account of the assessee in the books of Alka Industries Ltd., copy of bank statement showing relevant transaction, source of investment and also explained the factual position vide letter dated 30.01.2015. The AO during the course of re-assessment proceedings made addition of share application money of ₹ 1 crore received from Alka Diamond Industries Ltd. simplicitor on the basis of mere statement of Shri Praveen Kumar Jain without confronting the assessee. Moreover, no further enquiry was carried out by the AO whether the amount is explained or unexplained the fact that the assessee has submitted complete details before the AO. This issue is now settled in the case of CIT vs. Orchid Industries Pvt. Ltd. (2017 (7) TMI 613 - BOMBAY HIGH COURT) wherein held as referring to voluminous documentary evidence, only because those persons had not appeared before the Assessing Officer would not negate the case of the Assessee. - decided in favour of assessee. Addition of share application money - consequently addition of adhoc expenditure on account of commission paid to obtain these bogus capital at the rate of 5% - Held that:- There cannot be any doubt about the identity of the company. The amounts have been received from investing company have Come through banking channel which are duly reflected in the Balance sheet of the assessee company. Therefore, there cannot be any doubt about the genuineness of the transaction. So far as credit worthiness is concerned the investing company is regularly assessed to income tax and they are disclosing all - decided in favour of assessee.
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