2010 (9) TMI 105

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..... ibunal") in ITA No. 1931/Del/2009, for the Assessment Year 2004-2005. 2. Ms. Prem Lata Bansal, learned counsel for the Revenue submitted that the Tribunal had erred in law in deleting the addition of Rs.12,81,250/- made by the Assessing Officer (in short "AO") on account of unexplained share application money under Section 68 of Act. She further submitted that the Tribunal had deleted the said addition even though the respondent-assessee had not discharged its primary onus with regard to the identity, creditworthiness and genuineness of the transaction. 3. However, upon a perusal of the file, we find that the said addition was deleted by the Commissioner of Income Tax (Appeals) [in short "CIT (A)"] and Tribunal on the ground that the two .....

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..... company was involved in the business of providing accommodation entry has neither been confronted by the A.O. to the appellant during the course of assessment proceedings, nor it has been mentioned in the Assessment Order. The Hon'ble Delhi High Court in the case J.T. (India) Exports and another Vs. UOI and another (2003) 262 ITR 269 (Del-FB) has held that the Assessing Officer must pass a speaking order giving reasons for the conclusions arrived at and opportunity of being heard must be provided to the assessee, before passing any adverse order. It has been further held that in the notice issued by the A.O. specific requirement should be indicated and reasonable opportunity must be granted. It was held by the Hon'ble Delhi High Court that .....

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..... revenue has to proceed against the applicants and not against the company. This follows from the decisions of their Lordships of Supreme Court in the case of Lovely Export (supra) in which it is held as under: "The assessee had given details of the subscribing share applicants. In case the Department alleged that applicants were bogus, it was free to proceed against the applicants.  The share application money received could not be regarded as undisclosed income of the assessee company." 3.1 We must hasten to add that it is not our finding that share applicants in the present case are bogus.  Genuineness of the applicants and transfer of money from them has been clearly established. In case source of funds in the hands of appli .....

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