TMI Blog2013 (4) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... stantiate that the assessee has received bogus share application entry. Thus as decided in CIT Vs. Lovely Exports [2008 (1) TMI 575 - SUPREME COURT OF INDIA] that that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO then the Department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of the assessee. Also see C.I.T. vs. Gangeshwari Mtetal (P) Ltd. [2013 (1) TMI 624 - DELHI HIGH COURT] & C.I.T. vs. Goel Sons Golden [2013 (4) TMI 571 - DELHI HIGH COURT] . Thus as Assessee has submitted enough cogent material before the AO which substantiate the identity, creditworthiness and g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions given by the Directorate after making necessary inquiries. It was revealed that following entries have been received by the Company" "Rs. 10,00,000/- vide instrument no. 505157 dated 20.11.2001 and Rs. 10,00,000/- vide instrument no. 505309 dated 20.11.2001 from bank accounts of M/s Melode Electronics Pvt. Ltd. and M/s Rajshree Marketing and Services Pvt. Ltd." 3.1 In this regard, a show cause notice was issued to the assessee as to why such transactions not to be treated in its hands as unexplained cash credit. The assessee furnished its reply vide its letter dated 16.12.2009 confirming that it had received the said amounts from the above mentioned companies but that it was on account of share application money for allotment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed companies under the companies act. The confirmation by way of affidavit, PAN No., resolution passed by the share provider company and finally the evidence of shares allotted to the share capital providing company to the assessee company has been provided. Once these facts are established, the source of the money received in the share capital a/c is beyond any doubt and cannot be termed income from undisclosed sources to be covered u/s. 68 of the Income Tax Act. 5. Ld. Commissioner of Income Tax (A) further noted that in the course of assessment proceedings, Assessing Officer has not mentioned any detail of Investigation carried out and the specific information collected by the Department on the basis of which it was held that the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd.:- i. Copies of Cheques received from the party. ii. Copy of the income tax return acknowledgement fro the A.Y. 2001-02 and copy of audited balance sheet and profit and loss account alognwith all its schedules of the party are enclosed in support that the company was legal entity and existed on the date of payment of share capital money. iii. Affidavit from the company (share capital allottes) confirming the that the money has been paid by them by cheque towards the share capital of the assessee company including its PAN No. and the Ward where the Company was assessed. iv. Copy of the bank account of the company from where the money has been paid by them to the assessee company. v. Copy of resolution passed by the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee company. vii. Certificate of Incorporation from ROC of allottee company. 8. From the above, we note that assessee company has submitted that the share application money was received through the proper banking channel. The above also establishes the identity of the share application money provider company which are duly incorporated Company under the Companies Act. In this regard, confirmation by way of affidavit, PAN No., resolution passed by the share application provider company and the evidence of share allotment to the share company provided by the assessee company was duly submitted. In this regard, we note that Assessing Officer has not made any further independent enquiries to substantiate that the assessee has received bogus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons Golden Estate Pvt. Ltd. in I.T.A. 212/2012 vide order dated 11.4.2012 has held as under:- "We have examined the said contention and find that the assessee during the course of assessment proceedings has filed confirmation letters from the companies, their PAN number, copy of bank statements, affidavits and balance sheet. Thereafter the Assessing Officer had asked the assessee to produce the said Directors/parties. Assessee expressed its inability to produce them. The Assessing Officer did not consequent thereto conduct any inquiry and closed the proceedings. This is a case where the Assessing Officer has failed to conduct necessary inquiry, verification and deal with the matter in depth specially after the affidavit/ confirmation alon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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