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TMI Blog2012 (10) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of penalty proceedings u/s 271(1)(c ) of the Act. Since all these appeals belong to the same assessee and heard together, for the sake of convenience the same are being disposed of by passing a consolidated order. 2. First we will take up ITA No.1542 of 2005 and ITA No.1444 of 2005. Grounds in ITA No.1542 of 2005 are as under:- "On the facts and the circumstances of the case and in law, the ld. CIT(A) erred: 1) In deleting addition of Rs.41,99,900/- made by the A.O., u/s 68 of the Act. The decision given by him is arbitrary and without appreciating the facts of the case as will be evident from the undermentioned facts gathered from enquiry at the assessment stage: (a) The share applicant Shri Rajendra Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -." 3. Brief facts of the case are that assessee company was incorporated on 10th May, 2000. The authorized capital of the company is Rs.1.20 crores having Rs.1,20,000/- equity shares each of Rs.10/-. During the year under appeal all the equities shares were issued, subscribed and fully paid up i.e. the company has shown collection of Rs.1.20 crores with paid up share capital along with Rs.56,000/- as share application money in its books of accounts from 53 persons. The company did not start its business activities during the year under appeal. During the ocurse of assessment proceedings the list of share holders along with their holding in shares were furnished. The mode of payment for purchase of shares by the respective share holders w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri R.D. Amipura 100000 100000 6. Shri C.D. Amipura 100000 100000 7. Shri V.L. Amipura 100000 100000 8. Shri L.L. Amipura 25000 75000 100000 Total 445000 355000 80000 Category 'D' : Where letters were served, but replies were received through post. Rs. 22,00,000/-:- Sr.No Name of Applicants Paid by Cash Paid by D.D. Total Rs. 1. Shri J. S. Lakhani 50000 50000 100000 2. Shri B.C. Lakhani 20000 80000 100000 3. Shri J.J. Lakhani 28000 72000 100000 4. Shri B.G. Unhad 100000 100000 5. Shri V.K. Unhad 20000 80000 100000 6. Shri C.T. Satasia 100000 100000 7. Shri D.J. Satasia 100000 100000 8. Shri C.L. Satasia 100000 100000 9. Shri B.L. Satasia 100000 100000 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.55,00,000/- is held as unexplained share application money and the same is treated as income from undisclosed sources in the hands of assessee company. Accordingly, an addition of Rs.55,00,000/- is made u/s 68 of the Act to the income returned by the assessee company. Penalty proceedings u/s 271(1)(c) is also initiated on the issue." Aggrieved by this order of the A.O., the assessee went in appeal before ld. CIT(A) who after taking into consideration the submissions of the assessee, confirmed the action of the A.O. in respect of shareholders of category A, E and F and thereby confirmed the addition of Rs.13,00,100/- and gave relief to the assessee to the extent of Rs.41,99,900/-. Aggrieved by the relief given to the assessee Revenue is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the relief given by ld. CIT(A) was not justifiable and therefore, the order passed by ld. CIT(A) may kindly be set aside and that of the A.O. be restored. 6. After hearing both the parties and perusing the record, we find that there is no dispute about the fact that names and addresses of the persons from whom share application money was received by the assessee company are on record, thus, the identity of the subscribers is not in dispute. On these facts, this Bench of the Tribunal has been consistently following the decision of Hon'ble Apex Court in the case of CIT Vs. Lovely Export Pvt. Ltd. As, the ratio of Hon'ble Apex Court decision in the case of CIT Vs. Lovely Export Pvt. Ltd. is squarely applicable to the facts of this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ignoring the basic fact that the company being a public company can not have direct contacts with the prospective investors for a longer period and hence, any change in address should not be viewed against your appellant company for considering the share application monies u/s 68 of the I.T. Act as income of your appellant company and therefore, it is prayed to cancel the penalty in toto." 9. In this case assessment u/s 143(3) was completed determining total income of Rs.55,00,000/-. The A.O. made an addition on account of unexplained share application money amounting to Rs.55,00,000/-. The assessee preferred an appeal before ld. CIT(A) who confirmed the addition of Rs.13,00,100/- and deleted the addition of Rs.41,99,900/-. The A.O. levied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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