9911796707
TMI Blog2012 (7) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of share application money u/s 68 of the Income Tax Act. 2. On the facts and in the circumstances of the case the CIT(Appeals) has erred in deleting the addition of Rs.26,64,000/- on account of rent receivable." 2. The brief facts of the first ground are that the assessee derives its income from renting out the property. The assessee received share application money of Rs.15,00,000/- out of which Rs.1,00,000/- from Smt. Buddimati Yadav, Rs.3,50,000/- from Smt. Sarla Singh Yadav and Rs.10,50,000/- from Shri Rajveer Singh Yadav. The Assessing Officer asked the assessee to prove the creditworthiness, identity and genuineness of the share application money of Rs.15,00,000/- received during the year. The Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax as he is an agriculturist. The supporting evidence in respect of agricultural land along with affidavit confirming the fact that he has invested Rs.10,50,000/-in share application thus source of the investment was out of agricultural income. Shri Rajveer Singh Yadav was holding 20 bhigas of agricultural land. The CIT(A) noted that the assessee company has discharged onus regarding entries in books of account in respect of share application money. The Assessing Officer has wrongly rejected the assessee's submission without bringing on record any adverse material gathered as a result of any independent third party enquiry if the submission of the assessee was not found satisfactory. The CIT(A) accepted the fact that section 68 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; It is relevant to state that the assessee is a Private Limited Company, accordingly all the relevant provisions of Companies Act are applicable in respect of receiving share application money and issue of shares. To examine whether the transaction of share application is genuine or not, it is also required to be examined in the light of relevant provisions of the Companies Act. The fact that the companies which subscribe to the shares were borne on the file of the Registrar of Companies was a neutral fact. These companies have to comply with certain formalities in this regard. In any case, it did not ipso facto prove that the transaction was genuine. The assessee also did not file relevant resolution passed by the Board of Directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex court is reproduced as under :- (319 ITR (St) 6) The Court while dismissing held that "Can the amount of share money be regarded as undisclosed income under section 68 of the Income Tax Act, 1961 ? We find no merit in this 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 Assessing Officer, then the Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgement." : CIT v. LOVELY EXPORTS P. LTD.: S.L.P. (Civil) No.1153 of 2008. 6. After considering the totality of the facts of the case, we find that the CIT(A) deleted the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to have shown rent for ten months Rs.33,30,000/-, since the assessee followed Mercantile System of accounting. Therefore, the Assessing Officer made addition of Rs.26,64,000/-. The CIT(A) deleted the said addition as under :- (CIT(A) paragraph no.4.2) "Appellant's submissions along with assessment order have been considered carefully. Assessment records have also been perused. There is no denying the fact that letters written by the A.O. to the tenant, i.e. Salasar International Pvt. Ltd./Salasar Retail Ltd. sent by Speed Post at Delhi and Kolkata address have been received un-served by the A.O. with the remarks "left" and "refused". TDS certificate dated 04.07.08 shows receipt of rent of Rs.6,66,000/- on 01.08.07 on which prescr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nforce attendance of the tenant or issue of commission etc. to the concerned A.O. especially when tenant has sent clarification to the A.O. A.O. has concluded the fact of receipt of rent of Rs.33,30,000/- solely on the basis of TDS certificate issued by the lessee co. who itself has admitted the fact of wrong mentioning of period in the said certificate. Further, A.O. himself has disallowed depreciation on lift installed in the same building in respect of which rent is received by the appellant co. on the ground that the said building was not completed before October, 2007 and assets were not put to use. In view of facts above and after perusal of records, addition of Rs.26,64,000/- is, hereby, deleted." 8. We have heard the ld. Representa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
