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2018 (5) TMI 1085 - AT - Income TaxAddition u/s.68 - unexplained share application money - Held that:- The mere fact that “assessee” company chooses to show the receipt of the money as capital does not preclude the ITO from going into the question whether this is actually so. Where, therefore, the assessee company represents that it has issued shares on the receipt of share application money, then the amount so received would be credited in the books of account of the company. The ITO would be entitled to enquire, and it would indeed be his duty to enquire, whether the alleged shareholders do in fact exist or not. If the shareholders exist then, possibly, no further enquiry need be made. Set aside the orders of lower authorities and delete the addition of share application money of ₹ 12,58,000/- received from Ajit Keshari and ₹ 13,50,000/- received from Sri Aman Agarwal aggregating to ₹ 26,08,000/-. Thus, this part of the ground of appeal is allowed. With regard to share application money of ₹ 40,00,000/- received from four Private Limited Companies, we find that the findings of the Assessing Officer is that the Directors of said companies did not appear in response to summons issued u/s.131 of the Act All the corporate shareholders are assessed to income tax and have PAN Numbers. The CIT(A) could have made enquiries from the respective Assessing Officers and ascertained the current addresses. This has not been done. Further, as noted above, the Assessing Officer categorically accepts in the assessment order that summons issued u/s.131 of the Act was received by four share applicants. Thus, there is contradiction in the findings of the Assessing Officer and the CIT(A). It shall be in the interest of justice to set aside the orders of lower authorities and remand the matter back to the file of the Assessing Officer with a direction to make necessary enquiries from four corporate share applicants after allowing reasonable and proper opportunity of hearing to the assessee. The assessee is directed to co-operate with the Assessing Officer in verifying the four corporate share applicants. With these directions, this part of the ground is allowed for statistical purposes
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