TMI Blog2013 (12) TMI 1369X X X X Extracts X X X X X X X X Extracts X X X X ..... are application money emanated from the coffers of the assessee and the Assessing Officer has not made any inquiries from the concerned authorities nor did he examine the assessment record of the share applicants - Decided against Revenue. Correlation between cash deposits and cheques issued - Held that:- The disputed cash deposits were made out of cash withdrawals made from the same bank on earlier occasions and as per remand report, the Assessing Officer was satisfied about the source of cash deposited in the bank account of the assessee - When the balance matches with the balance sheet and cash book, no addition u/s 68 of the Act is sustainable - Decided against Revenue. - I.T.A.No. 4086/Del/2010 - - - Dated:- 20-12-2013 - Shri G. D. Agrawal And Shri Chandra Mohan Garg,JJ. For the Appellant : Shri Salil Agarwal, Shailesh Gupta For the Respondent : Shri Sameer Sharma, Sr. DR ORDER Per Chandramohan Garg, Judicial Member This appeal has been preferred by the Revenue against the order of the Commissioner of Income Tax(A)-XXI, New Delhi dated 25.06.2010 in Appeal No.242/08-09 for AY 2003-04. Originally, the following grounds were raised by the revenue at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties on the issue of admissibility of additional grounds. Ld. DR submitted that at the time of filing of appeal, ground no.1 was raised pertaining to the deletion of addition of Rs.1.65 crore made by the Assessing Officer on account of share application money received by the assessee and the additional grounds are merely an elaboration of this ground to agitate all the issues related to this impugned addition made u/s 68 of the Income Tax Act, 1961. Ld. counsel of the assessee objected the admissibility of above additional grounds of the revenue and submitted that ground already placed at the time of filing of appeal is sufficient and there is no need of additional ground in this regard. The counsel of the assessee also submitted that the revenue is trying to submit facts of the issue in the form of additional grounds which is not permissible. On careful consideration of above submissions, we are of the view that the revenue has raised ground pertaining to addition of Rs.1.65 crore made by the Assessing Officer on account of share application money and additional grounds are merely an elaboration of this ground. The revenue wants to agitate the issue on the legal and factual matr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. The DR supported the assessment order and submitted that the Commissioner of Income Tax(A) deleted the impugned addition without any basis and cogent material and wrongly held that once the identity of share applicants is proved, no addition can be made in the hands of assessee even if the share applicants have been found to be persons of no means until and unless it is otherwise proved by the revenue. The DR supported the assessment order and submitted that the Commissioner of Income Tax(A) wrongly held in the impugned order that the revenue could not prove that the money received by the assessee in the form of share application money has come from its own sources. The ld. counsel of the assessee drew our attention towards the decision of Hon ble Delhi High Court in the case of Sarthak Securities Ltd. 329 ITR 110 (Del) and submitted that when the names of the companies which granted share application money were available with the Assessing Officer and their legal existence was not disputed by the Assessing Officer, and further when the share applicant company had bank accounts and the payments were made to the assessee through banking channels and the identity of the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication money as has been given by them to the assessee company. The onus to prove their creditworthiness squarely lay on the assessee but it has totally failed to discharge the onus cast on it. In these circumstances there is no alternative left than to draw an adverse inference regarding the creditworthiness of the three share applicants. The plea of the assessee that it has not allotted any share to the applicants and had refunded the same either during that year or in the subsequent year also does not give any leverage to the assessee. The important issue is whether any benefit has been derived or not from the share application money so received. It is seen that the share application money under consideration has been received by the assessee on various dates mostly during December 2002 barring two cheques one of which is dated 18.11.2002 and another which is dated 15.02.03. The share application money received has been utilised along with other funds to give loans and advances to several parties as apparent from the narrations given in the copies of bank statements of the assessee of Current Account No. 530011003562 maintained in ING Vysya Bank Ltd., Karol Bagh, New Delhi wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be unexplained income of the assessee under section 68 of the Income-tax Act, 1961. However, in appeal, the CIT(A) held in favor of the assessee and allowed the assessee's appeal by holding that the assessee had produced the PAN numbers, confirmatory letters, returns of income, etc. in respect of the parties who had made the said investments. Therefore, the Commissioner of Income-tax (A) had come to the conclusion that the preliminary onus, which was upon the assessee, had been discharged by him. Consequently, the addition made by the Assessing Officer stood deleted. The Income tax Appellate Tribunal, in the appeal preferred by the revenue, confirmed the order passed by the Commissioner of Income tax(A) and found that the said share application money was substantiated by the assessee by providing all the necessary details as indicated above. The two authorities below, on findings of fact, held that the assessee was not liable tot any addition on account of the said share application money. We see no reason to interfere with the said findings". In the case of CIT Vs Dwarkashis Financial Services Pvt. Ltd vide ITA No. 439/2010 has held that:- This is an appeal against the order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... until and unless it is otherwise proved by the revenue. The revenue could not prove that the money received by the appellant in the form of share application money has come from its own sources. In view of the discussion made above the addition of Rs. 1.65 crores is deleted. However the AO is, free to take appropriate action as may be permissible under the law in the case of various shareholders alleged to be entry providers. 9. In view of above observations and findings of the Commissioner of Income Tax(A) in the impugned order, we clearly observe that the disputed share application money was received through banking channels and names, address, PAN Nos. supported by confirmation, copies of bank account, copies of application for return of shares, copies of annual accounts of share applicants, copies of return of income of share applicants and affidavits of the office bearers of the applicant companies were submitted before the revenue authorities and all these details were confronted to the Assessing Officer. From careful perusal of the remand report and the assessment order, we are unable to see any finding of fact that the assessee company routed or used its own money thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit and loss account of the assessee, its income and receipts are nil and the assessee has not carried out any business during the year, there was no increase in the share capital but the same was not received in cash and the opening and closing balance of the current liabilities have remained the same, then in these circumstances, the amount found deposited in cash to the bank account of the assessee was rightly added to the income of the assessee u/s 68 of the Act. The DR forcefully contended that since there was no explained source from which the assessee had received the disputed cash deposits found in its bank account, then the Assessing Officer rightly made an addition in this regard because there was a clear concealment of income and furnishing of inaccurate particulars of income by the assessee. 11. Replying to the above, ld. counsel of the assessee pointed out that the copies of the replies before the Assessing Officer (page no. 19 to 74), copies of ledger and cash book (PB page no. 75-76), copy of bank statement related to financial year (PB page no. 77 to 86), copies of the submission before the Commissioner of Income Tax(A) dated 08.02.2009 (PB page no. 87-92), copy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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