TMI Blog2010 (5) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... who reiterated the confirmation given by them and also supplied copies of their accounts. The Assessing Officer, however, added the entire amount of ₹ 44 lakhs to the income of the assessee company, on the grounds that the parties were not produced by the assessee, some of the applicants had a common address during inspection by the Income Tax Inspector, five applicants were not found functioning at the given address and reply submitted by the applicants were late. – CIT(A) and ITAT deleted the addition. Held that: The Assessing Officer was not justified in adding the amount of share application money to the income of the assessee, merely because the applicants did not respond to the notices sent to them. If the Assessing Officer so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company received share application money amounting to Rs 44 lakhs from 12 private limited companies. The assessee company filed income tax return declaring income of Rs 2,20,880/- for the year in question. The case was initially processed under Section 143(1) of Income Tax Act. Subsequently, on receipt of information that the assessee company had received accommodation entries, notice under Section 148 of Income Tax Act was issued. During the course of assessment, when asked to prove the identity and creditworthiness of the applicants and genuineness of the transactions, the assessee company furnished copies of their applications for allotment of shares, confirmation of payments, copies of their Certificates of Incorporation, printouts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmation from the applicants, copies of Share Application Money, PAN card, etc., were also filed. The Tribunal was of the view that in these circumstances, it cannot be said that the identity of the share applicants did not stand established. Relying upon the decision of the Supreme Court in the case of CIT vs. Lovely Exports (P) Ltd., 216 CTR 198, the Tribunal declined to interfere with the order passed by the Commissioner of Income Tax (Appeals). 5. The issue involved in this appeal came up for consideration before this Court in CIT vs. Divine Lasing Finance Ltd. 299 ITR 268. After reviewing the case law on the subject, this Court was of the view that in the context of Section 68 of the Income Tax Act, the assessee has to prima fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find no in Special Leave Petition for the simple reason that if the share application money is received by the assessee-company from alleged bogus shareholders, whose names are given to the AO, then the department is free to proceed to reopen their individual assessments in accordance with law. Hence, no infirmity is found with the impugned judgment. 7. It has not been disputed before us that the share application money was received by the assessee company by way of account payee cheques, through normal banking channels. It is not the case of the Revenue that the payment of Share Application Money was not made from the bank account of the applicant companies. Admittedly, copies of application for allotment of share were also provided to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. All the share applicants were duly served with the notices under Section 133(6) of the Act. In these circumstances, the finding of Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal that the identity of the subscribers stood duly established from the documents produced by the assessee, cannot be said to be perverse and does not call for interference by this Court. 9. The finding of fact recorded by the Tribunal, which is the final fact finding authority, cannot be said to be perverse merely because some of the applicants had a common address and the Inspector deputed by the Assessing Officer to make field inquiries did not find five applicants functioning at the addresses provided to him. There is no legal bar to mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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