TMI Blog2013 (5) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... ty case (2011 (1) TMI 194 - DELHI HIGH COURT ) the assessee has discharged its onus approving the share application money u/s 68. For remaining two minor share applications in respect of Davendra Kumar and Mool Chand, assessee has filed their confirmatory letters along with PAN numbers. This is further supported by the returns of past several years and statement of affairs - Against revenue. Addition on account of credits from M/s Integra Telecommunication & Software Ltd. (ITSL) - CIT(A) deleted the addition - Held that:- As already held that the identity and creditworthiness of this party is established, transactions are through bank a/c. The assessee has received an amount of Rs. 5 lacs by a/c payee cheque no. 128813 dated 12-10-2004 and Rs. 1 lac by a/c payee cheque no. 128812 on 12-10-2004. the debit of these amounts is reflected in ITSL a/c and credited in the assessee's bank account. Copy of reciprocal accounts are also on the record. Thus no infirmity in the order of CIT(A) in deleting the addition. Against revenue Interest accrued but not declared as income - CIT(A) deleted the addition - Held that:- There is no enabling provision by which notional income can be added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs. 2. The Ld. CIT(A) has erred on facts and in law and on facts in deleting addition of Rs. 4,48,000/- (actual figure Rs. 4,80,000/-) on account of unexplained share application money, ignoring that the assessee failed to prove the sources of the same during the course of assessment proceedings. 3. The Ld. CIT(A) has erred on facts and in law and on facts in deleting addition of Rs. 6,00,000/- on account of credits from M/s Integra Telecommunication Software Ltd. (ITSL), ignoring that the copy of account of the assessee in the books of account of ITSL does not match with the confirmation filed by the assessee. 4. The Ld. CIT(A) has erred on facts and in law and on facts in deleting addition of Rs. 73,000/- on account of interest accrued but not declared as income, ignoring that the assessee failed to submit any reply during the course of assessment proceedings on a specific show cause on this issue. 5. The Ld. CIT(A) has erred on facts and in law and on facts in deleting addition of Rs. 4,76,000/- on account of amount received from M/s Global Info System Ltd. for the sale of non-existing fixed assets, ignoring that the assessee failed to submit any reply during the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash amounted to Rs. 10,28,500/-. The assessee filed a proper reconciliation and cash flow statement and demonstrated that apart from the receipt of software sales, there were other receipts also. The same have been recorded in the books of a/c and thus the cash deposits in bank came out from the cash in hand available in the books only. CIT(A) after duly verifying these facts and books of a/c has properly deleted the addition by following observations:- 3.2. Revenue's ground no. 2(iii) is against addition of 6 lacs on account of credits appearing in the account of M/s Integra Telecommunication Software Ltd. (ITSL) The AO has added this amount vide his observations in para 2 at page 2 3 of the impugned assessment order. According to the AO, copy of account of Integra Telecommunication Software Ltd. does not match with the confirmation of M/s Integra Telecommunication Software Ltd. submitted by the assessee which raises serious doubts about the genuineness of the transactions entered by the assessee with M/s Integra Telecommunication Software Ltd. The AO further observed that the assessee was asked to show cause why addition of Rs. 10 Lacs be not made on account of credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on money of Rs. 4 Lacs which was embedded In account payee cheque No. 128813 dated 12//10/04 for Rs. 9 Lacs deposited In assessee's bank account copy which is placed at P.B. on lDBI Bank which was received from them by the appellant towards purchase of shares and fixed assets. Before the AO, the appellant had filed letter dated 1/11/07 received by the appellant from M/s Integra Telecommunication Software Ltd. Along with their bank statement which clearly shows debit of Rs. 9 Lacs in their bank account on 12/10/04. Copy of account of the appellant in the books of Integra Telecommunication Software Ltd. was also filed before the AO and CIT(A) giving therein identity details and PAN No. AAACI9473Q. The above documentary evidence is on the file of the AO, therefore, the observations of the AO to the contrary are factually incorrect. A copy of account of Integra Telecommunication Software Ltd. in the books of the assessee was also filed before the ASSESSING OFFICER. All these documentary evidence demonstrate that the account of Integra Telecommunication Software Ltd. was an old account with an opening balance of Rs. 1,07,000/-. The appellant had sold shares worth Rs. 4,09,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in view of the submissions and the documentary 'evidence mentioned above. Following case law is relied upon. Thus, the assessee duly explained and reconciled the position vis a vis share application money and alleged difference in account in the case of ITSL. CIT(A) after due verification of all parameters has rightly deleted the addition. 3.7. Apropos ground no. 5 in respect of M/s Global Info System Ltd. ("GISL"), both the parties agree that the correct figure is Rs. 8,06,000/- (not Rs. 4,06,000/- as mentioned in revenue's ground). Ld. Counsel for the assessee contends that the assessing officer made the addition by following observations:- "a) Copy of the account of M/s Global Info system Ltd. in the books of the appellant as filed before the AO is placed at page 51 which shows that there was debit balance of Rs. 9,26,000/- as on 18/09/04 and it was against such amount that the appellant had received cheque of Rs. 4,50,000/- and Rs. 4,76,000/- on 12/10/04. It was through oversight that against the credit of Rs. 4,76,000/-, the words "sale of fixed assets" was written by the appellant. This position could not be cleared before the AO. in view of the submissions made above wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art from the entries made in the account books of the appellant coupled with the entries made in the respective account of both the parties. Copy of confirmation of TSR Financial Services (P) Ltd. Along with copy of bank statement showing the cheque no. 1607 dated 18/09/04 debited in their bank statement Rs. 3,99,000/-, placed on P.B. supports the claim of the assessee. 4. We have heard rival contentions and perused the material available on record. Revenue is not in appeal before us on the admission of additional evidence, besides CIT(A) called for remand report from assessing officer who chose not to submit his comments. In view of these facts and circumstances, we are unable to accede to the request of the ld. DR that the matter should be set aside. 4.1. Apropos ground no. 1, the addition was made by the assessing officer observing that the assessee's sale proceeds in cash from software are less than the cash deposits in bank for which the assessee ahs given satisfactory explanation about there being other receipts which are duly incorporated in the account books. In view of these facts we see no infirmity in the order of CIT(A) on this issue. This ground of the revenue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to share application money account and Rs. 5 lacs were credited to ITSL other running account. The allotment of shares has been duly intimated by the assessee to ROC. In view of these facts, relying on the judgment of Delhi High Court in the case of Oasis Hospitality (supra), we are of the view that the assessee has discharged its onus approving the share application money u/s 68. The addition is deleted. 4.3. Coming to remaining two minor share applications in respect of Davendra Kumar and Mool Chand, assessee has filed their confirmatory letters along with PAN numbers. This is further supported by the returns of past several years and statement of affairs. We are of the view that assessee has discharged its initial burden in terms of sec. 68 in respect of identity, creditworthiness and genuineness for these two share applicants who deposited Rs. 40,000/- each. In view thereof, we uphold the order of CIT(A) deleting this addition. Thus, ground no. 2 of the revenue's appeal is dismissed. 4.4. Coming to ground no. 3 in respect of balance credit of Rs. 6 lacs in account of ITSL, we have already held that the identity and creditworthiness of this party is established, transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting this addition. 4.7. That leaves us with last ground I respect of Rs. 8,06,000/- from GISL as unexplained cash credit. Ld. Counsel for the assessee ahs demonstrated that this confusion was created by assessee depositing two cheques by one paying slip into Axis Bank by which the cheque of Rs. 4,07,000/- received from GISL and cheque of Rs. 3,99,000/- received from TSR Financial services were deposited in Axis Bank which issued a transaction slip mistakenly writing it to be from Global Infosis. Thereafter assessee approached the Axis Bank which issued a revised transaction slip correcting the mistake, which is placed on paper book at page no. 43 in which amount of Rs. 8,06,000/- is shown to have been collected from Global Infosys and TSR Financial. Thus assessee's explanation has been corroborated by the banks revised certificate. 4.8. Ld. counsel for the assessee has made reference to the accounts of Global Infosys and TSR Financial in which the respective amounts of Rs. 4,07,000/- and Rs. 3,99,000/- have been credited. The assessing officer made the addition only relying on the mistaken certificate issued by Axis bank ignoring the proper explanation of the assessee whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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