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TMI Blog2012 (7) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... as erred in deleting the addition of Rs. 15,00,000/- made u/s 68 of I.T. Act ignoring the fulfillment of the condition laid down by the Law. 3. The appellant craves to add, alter, amend, delete or withdraw any ground of appeal during the course of appellate proceedings." 2. Facts, in brief, as per relevant orders are that e-return declaring income of Rs. 32,780/- filed on 21.11.2006 by the assessee, engaged in the business of manufacturing and trading in home furnishing, after being processed u/s 143(1) of the Income-tax Act, 1961[hereinafter referred to as the 'Act'], was selected for scrutiny with the service of a notice u/s 143(2) of the Act. During the course of assessment proceedings, the Assessing Officer[AO in short] noticed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Rs. 5 lacs and cheque no.135103 dated 8.3.2006 for Rs. 5 lacs while debit entry as per bank statement of M/s Melco Sales Pvt. Ltd. reflected DD issued. Likewise in the case of M/s Poonam Corporation Ltd., the assessee stated that the payment was made vide cheque no.858141 dated 23.02.2006 while the credit entry in the PNB account of the assessee company showed deposit of cheque no.858141 on 22.02.2006 a day earlier than the date of issue of cheque by M/s Poonam Corporation Ltd. In view of these discrepancies , the amount of Rs. 10 lacs received from M/s Melco Sales Pvt. Ltd. and Rs. 5 lacs from M/s Poonam Corporation Ltd., as share application, remaining unverifiable, the AO added the same as income of the assessee from undisclosed sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication on the genuineness of the cash credit being share application money received from M/s. Melco Sales Pvt. Ltd. Therefore with regard to this sum of Rs. 5 lacs in view of the simple error in wrongly stating the demand draft to be a cheque instrument while the number of instrument was correctly stated, it is held that the appellant has been able to satisfactorily explain the receipt of the cash credit of Rs. 5 lacs from M/s Melco Sales Pvt. Ltd. as share application money. The appellant has been able to prove all three essential ingredients for establishing the genuineness of the cash credit under section 68 i.e. identity of the creditor, genuineness of the transaction and credit worthiness of the creditor. It is accordingly held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s has emanated from the bank account of M/s. Melco Sales Pvt. Ltd. and the appellant has received it as share application money in its bank account. In view of the evidences on record, the mismatch as observed by the Assessing Officer is found to be duly explained by the entries in the bank statement of the appellant as well as the share applicant. There is therefore no case for treating the remaining amount of Rs. 5 lacs received from M/s. Melco Sales Pvt. Ltd. as unexplained cash credit. It is accordingly held that this amount is also fully explained in terms of section 68 of the IT Act. 4.10 The balance addition of Rs. 5 lacs pertains to the share application money of Rs. 5 lacs received from M/s. Poonam Corporation Pvt. Ltd. The Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reversal of the entry on 23.2.2006 and ultimate credit entry on 23.2.2006 went unnoticed. Hence, there is no mismatch even to this transaction. However, in the confirmation of account, the date of ultimate clearing was mentioned by the share applicant instead of the date of issue of the instrument." 4.10.3 The above explanation of the Ld. Counsel is found to be correct. A perusal of the appellant's bank statement shows the credit of Rs. 5 lacs on 22.2.2006 and a contra entry of the same on 23.2.2006 bearing narration of "858141SDL 006300 wrongly cleared." Thereafter after more entries on 23.2.2006 itself, the cashiers cheque i.e. demand draft no.858141 has been credited through clearing. Thus the Demand draft deposited on 22.2.2006 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidences as discussed above, it is held that the entire addition of Rs.15 lacs under section 68 relating to the share application money is unwarranted and is accordingly deleted. " 4. The Revenue is now in appeal before us against the aforesaid findings of the ld. CIT(A).The ld. DR supported the order of the AO while the ld. AR on behalf of the assessee company relied upon the findings in the impugned order. 5. We have heard both the parties and gone through the facts of the case. Indisputably, certain discrepancies crept in while furnishing the information requisitioned by the AO from the assessee in respect of the aforesaid amount of Rs. 10 lacs from M/s Melco Sales Pvt. Ltd. and Rs. 5 lacs from M/s Poonam Corporation Ltd. towards sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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