2015 (12) TMI 1862 - AT - Income Tax

Unexplained share application money - Information u/s 133(6) as received from the following parties - Proof of identity of the share applicants, their creditworthiness and genuineness of the transaction - HELD THAT:- In the present case the assessing officer himself has not doubted the identity in respect of all the share holders of the assessee company. Hence, the following the decision of the Hon’ble Co-ordinate bench in the case of M/s Agrawal Coal Corporation[2011 (10) TMI 496 - ITAT INDORE]the amount of share application money as received by the assessee requires to be accepted as genuine.

As regard share premium of ₹ 990/- Per share is concern, the assessee company is a big player in the Media segment and engaged in the Print and Boarding business. The assessee company was incorporated on 05-04-1989 and therefore having more than 20 years experience of this line of business. The assessee company declared total income in its books of account prior to depreciation was of ₹ 9995881/- as on 31.03.2008 and the same was increased to ₹ 12489838/- as on 31.03.2009. That considering the long standing in the business and huge profit the amount of share premium is duly justifiable. That in case of private limited company the amount of share premium is mutually decided between the Management of the company and share applicant. Hence, the issue in dispute should not be the amount of share premium but the identity of the share holders who has applied in the share application money of the assessee company.

Once the assessee has established the identity of the share holder in that case the amount of share premium is not an issue. If the assessing officer has not satisfied with the explanation of the share applicant, necessary addition is to be made in the hand of the share applicant but not in the case of the assessee.

That as regard the blank transfer deed duly signed by the share applicant as found during the course of survey. The assessing officer himself after being satisfied not taking any cognizance for the same. Since, by the time of assessment proceeding these transfer deed was not used by the assessee and therefore after the date of Annual General Meeting , old date transfer deed has no legal value.

Additional evidence filed before the Ld CIT[A] - department in this ground of appeal has challenged the Rule 46A of the Income Tax Rules - HELD THAT:- During the course of hearing, we find that the assessee has submitted all the documentary evidence before the Assessing Officer and the ld. DR has not disputed this fact, therefore, we are of the view that this departmental ground deserves to be dismissed. We dismiss the same.