TMI Blog2011 (7) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal has been preferred by the assessee under section 260A of the Income-tax Act, 1961 (in short "the Act") against the order dated 22-10-2010 passed by the Income-tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 706/Chd./2009, relating to the assessment year 2005-06, claiming the following substantial questions of law:- "(i) Whether in facts and circumstances of the case, the action of the authorities below in treating the subscription of the share capital by alleged bogus shareholder as undisclosed income of the assessee is legally sustainable in the eyes of law? (ii) Whether in facts and circumstances of the case, the action of the authorities below in ignoring the law laid down by the Hon'ble Supreme Court in the case of CIT v. Steller Investment Ltd. [2001] 251 ITR 263 is legally sustainable in the eyes of law? (iii) Whether in the facts and circumstances of the case, the action of the authorities below is result of an error in interpreting the decision of the Hon'ble Apex Court in the case of Lovely Exports (supra)? (iv) Whether in facts and circumstances of the case, the authorities below have er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the Tribunal. The Tribunal vide order dated 22-10-2010 rejected both the grounds of the assessee which gave rise to the assessee to approach this Court by way of instant appeal. 3. We have heard learned counsel for the appellant. 4. Learned counsel for the assessee submitted that the Tribunal had erred in treating the income on account of share application money to be undisclosed income of the assessee. According to him, the department could have proceeded against the individuals in whose name the share application money was deposited. He relied upon the ratio laid down by the Hon'ble Supreme Court in CIT v. Lovely Exports (P.) Ltd. [Application No. 11993 (SC) of 2007, dated 11-1-2008] and the judgment of the Delhi High Court in [CIT v. New Age Infosys (P.) Ltd. IT Appeal No. 1469 of 2010, dated 27-9-2010]. Learned counsel also urged that the disallowance of Rs. 6,00,000 on account of interest relatable to advances to Mr. Ashok Anand and Mrs. Raj Rani Anand under section 36(1)(iii) of the Act was unsustainable. 5. We do not find any substance in the submission made by learned counsel for the assessee. The Tribunal while upholding that the amount of Rs. 42,78,756 received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are holders whose names were given, no addition can be made in the hands of the assessee company and action, if any, is to be taken only in the case of the share applicants. The CIT(A) held that the assessee had not discharged his primary onus of establishing identity, credit worthiness and genuineness of transaction under section 68 of IT Act. Moreover, entire sum was received in cash where genuineness of transaction is always in doubt. The CIT(A) further held that the assessee had failed to file the confirmation from the creditors and onus not being discharged, the addition merits to be upheld. The Ld. A.R. for the assessee drew our attention to the share application forms received from 28 persons placed at pages 7 to 34 of the paper book in which the requisite details of each persons was given. The Ld. D.R. for the revenue placed reliance on the order of CIT(A) and pointed out that the amounts in question were received in cash and the identity of the share holders not having been established, the addition merits to be upheld. 10. We have heard the rival submissions and perused the record. The assessee company during the year under consideration had raised share application of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essments in accordance with law. Hence, no infirmity is found with the impugned judgment." 12. The Hon'ble Delhi High Court in CIT v. Winstral Petro Chemicals (P.) Ltd. [IT Appeal No. 592 of 2010] date of judgment 12-5-2010 after relying on the ratio laid down by the Apex Court in Lovely Exports (P.) Ltd. (supra) observed that where the identity of the subscriber has been established by way of different proofs filed in this regard and if the Assessing Officer entertains any doubt about the genuineness of the documents, the same could have been verified by him from the records available with the authorities. From the above said, it transpires that the onus is upon the assessee to establish the identity of the subscriber in relation to the share application money received. Where the assessee fails to establish the identity of the subscriber, the onus cast upon the assessee to prove that the credits are genuine does not stand discharged. The Assessing Officer during the course of assessment proceedings, on the perusal of the information furnished by the assessee found the assessee to have only disclosed the names of the persons and incomplete addresses were bearing only thumb impres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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