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TMI Blog2012 (7) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... d Return of income on 24-10-2007 declaring total income of Rs.13,77,800/-.The case was selected for scrutiny. During the course of assessment proceedings, the A.O. observed that the assessee has claimed to have received share application money aggregating to Rs.30 lacs. The assessee was asked to furnish the complete details. The scrutiny of the details revealed that the authorized share capital of the assessee was Rs.25,00,000/- and the assessee's paid up capital was already Rs.12,74,000/- therefore the balance share capital which the assessee could allot was Rs.12,26,000/-. As against it the assessee had received Rs.30 lacs as share application money. The A.O. further noticed that though the assessee was a loss making company, having carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income into the books without payment of taxes. He accordingly held the credit entries in the books of the assessee in the form of share application as unexplained and added Rs.30 lacs to the total income of the assessee. 3. The assessee being aggrieved by the decision of the Assessing Officer carried the matter before CIT (A). Before CIT(A) it was contended that the assessee has filed before the A.O. the copies of Income tax returns, copies of share application, account confirmations and the copy of relevant bank statement highlighting the cheques received from the share applicants. The CIT (A) held that since the assessee has discharged the onus cast upon it as required u/s. 68, deleted the addition. Aggrieved by the order of CIT (A), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the year assessee had received share application money aggregating to Rs 30 lacs from 3 private limited companies which were considered to be the companies of the friends and relatives of the Assessee. The breakup of the share application money was Rs 5/- per share towards the equity capital and Rs 5/- per share towards the share premium account. The 3 share applicants are from Kolkata and the two applicants namely Dharavi Management Services Pvt Ltd and Fedder Tieup Pvt. Ltd have common address. A survey action u/s 133A was carried out at the Assessee's premises in the month of September 2009 and it was found that the assessee had forfeited the share application money of Rs. 30 lacs from the 3 concerns and also forfeited Rs 10 lac receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent field but at the same time compliance with the other applicable laws can give insight while deciding an issue relating to an Income Tax. Before us, the Ld. A.R. contended that the assessee has complied with the necessary requirements as contemplated u/s 68 and therefore CIT (A) was right in deleting the addition made u/s 68. 6. In the case of CIT Vs Nova Promoters & Finlease (P) Ltd (ita No 342 of 2011) the Hon'ble Delhi High Court has observed as under: "Para 35.The facts of Lovely Exports (P) Ltd (2008) 216 CTR (SC) 195 as noted by this court are these: The assessee company in that case had furnished the necessary details such as PAN No/ income tax ward no/ ration card of the share applicant and some of them were assessed to tax. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal regime would not be the same." In para 38 of the decision the Hon'ble HC while analysing the dismissal of Special Leave Petition by Hon'ble Supreme Court in the case of Lovely Exports (P) Ltd (SLP No 11993/2007) has observed as under: "The ratio of a decision is to be understood and appreciated in the background of the facts of that case. So understood, it will be seen that where the complete particulars of the share applicants such as their names and addresses, income tax file numbers, their creditworthiness, share application forms and share holder's register, share transfer register etc are furnished to the AO and the AO has not conducted any enquiry into the same or has no material in his possession to show that those particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be applicable to the present case because in the case before us for the reasons (i) that AO had issued summons u/s 131 to the Managing Director but there was no compliance, (ii) that the audited accounts of the companies who had made share application were not made available to the AO, (iii) that the share application money received from the investors were forfeited by the Assessee and for which nothing is on record to prove that the notice was issued to investors to indicate the intention of the Assessee to forfeit the share application money, (iv) that the assessee had received premium on the share to be allotted though it was a loss making company (v) that in view of the facts that the AO has given a clear finding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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