TMI Blog2010 (5) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... of each company regarding investment in purchase of equity shares of M/s Hitkarni Prakashan Ltd. and copy of their bank accounts indicating availability of funds for purchase of shares. Thus, the assessee had proved the identity of the four companies, genuineness of transactions and also creditworthiness of the companies. We also find that each company is income-tax assessee and disclosed share application money in their accounts which were duly reflected in their IT returns. In our considered view, the learned CIT (A) was fully justified in deleting the addition. Recently, in the case of Lovely Exports (P) Ltd. [2008 (1) TMI 575 - SUPREME COURT OF INDIA] held that if the share application money is received by the assessee company from alle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns, resolution of the board and copy of memorandum etc. The AO took the view that these documents were not enough to prove the creditworthiness of the companies and the genuineness of the transaction. The AO further opined that it was unbelievable that a company would buy a share of ₹ 1,000 on a premium of ₹ 4,900, whose memorandum of association did not have any object of doing business/investment in the line of printing press. He, therefore, held that the share capital introduced was not proved satisfactorily and taxed the same under s. 68 of the Act. 4. Aggrieved by the order of the AO, the assessee carried the matter in appeal before the learned CIT (A). Before the learned CIT(A), the assessee took the following lin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olution passed at the meeting of the board of directors along with the copy of memorandum of association and articles of association of the four specific companies, certificate of the Asstt. RoC to certify the incorporation of companies and the certificate of the Asstt. RoC regarding commencement of business. 5. The learned CIT (A) sent the above documents to the AO for his comments. The AO objected to its admittance for the reason that on perusal of the bank accounts, it would be noticed that the amounts were credited in the respective bank accounts just before the transaction. The AO also stated that the memorandum of association of companies did not speak about trading of shares or investment in shares. However, the learned CIT (A) di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... newspapers, magazines, news cassettes, journals and periodical in Hindi, Urdu, Marathi, Gujarati, English'. Further, there is also no bar as per the Companies Act nor any restriction regarding purchase of shares on premium. As held in the case of CIT v. Orissa Corporation (P) Ltd. [1986] 52 CTR (SC) 138 : [1986] 159 ITR 78 (SC), the assessee by furnishing above documentary evidences had discharged his burden that lay on him. If still the AO disbelieved it was his onus to bring forth evidences to disprove the assessee's without which no such addition could have been made. This finds support with the decision of the Hon'ble Delhi High Court in the cases of CIT v. Makhni Tyagi (P) Ltd. [2004] 187 CTR (Del) 550 : [2004] 267 ITR 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Mansion, 1st Floor, 4th Cavel, X Lane, Mumbai, 3. M/s Saikripa Metallic Tradecom Ltd., 12, Engineering Mansion, 1st Floor, 4th Cavel, Cross Lane, Kalbadevi Road, Mumbai, 4. Chirag Strips (P) Ltd., 111 Champaklal Estate, Plot No. 105, Sion Koliwada Road, Sion (E), Mumbai. 7.1 There is no dispute that all the above four companies had issued confirmation letters regarding purchase of shares from the assessee-company. They had also quote their PAN. Furthermore, these companies had also furnished memorandum of association and articles of association, certificate of incorporation issued by the Asstt. RoC and certificate issued by the Asstt. RoC regarding commencement of business. The assessee had also submitted resolution of board of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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