TMI Blog2014 (2) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... e inability of the noticees who are approached by the AO to afford any reasonable explanation as to how they got the amounts given the nature of their income which was disproportionally less than what they subscribed as share capital would also amount to the Revenue having discharged the onus if at all which fell upon it - the assessee in the case was incorporated barely few months before the commencement of the assessment year, and there is no further information, or anything to indicate why its markup of the share premium thousand folds in respect of the shares which were of the face value of ₹ 10 lakhs was justified – Decided partly in favour of Revenue. - ITA 493/2013 - - - Dated:- 27-1-2014 - S. Ravindra Bhat And R. V. Easwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m did not receive the notice and 9 received the notices and apparently had responded. Based on the materials on record, the AO framed the assessment adding the entire amount under Section 68. The assessee claiming to be aggrieved approached the Commissioner (Appeals) and successfully argued that once the identity of the investors had been disclosed, it had discharged the burden imposed upon it by law and that the amount could not be added back under Section 68. The Commissioner of Income Tax (Appeals) directed the deletion of Rs. 1.10 crores holding that since these individuals had responded and furnished the particulars elicited, the AO should not have added the amount as income. Almost similar approach was adopted in respect of the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stors but also carried on further enquiry which led into the conclusion that such persons or individuals could not have made the extent of investment that was claimed and that in these circumstances the addition under Section 68 was justified. 5. Counsel for the respondent submitted that the impugned order should not be interfered with given that it has concurrently upheld the decision to set aside the addition under Section 68. It was stressed that once the assessee disclosed the identity of the investors - as it did in the present case - the onus clearly shifted to the Revenue which then had to record its satisfaction based only on some objective material. In the present case, 28 investors had responded to the notices issued; 11 did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls or entities subject to taxation. Counsel, therefore, submitted that this Court should not interfere with the impugned order. 7. In Lovely Exports (supra), the Supreme Court emphasized that the initial burden is upon the assessee to show as to the genuineness of the identity of the individuals or entities which seek to subscribe to the share capital. Once the relevant facts are furnished, the onus, stated the Supreme Court, shifts to the Revenue. In the present case, what this Court is to determine, therefore, is whether the burden had been fully discharged and whether the AO recorded its conclusion on the basis of the material on record. The AO in its order has produced the tabular statement describing the number of shares subscribed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given the addresses, the inability of the noticees who are approached by the AO to afford any reasonable explanation as to how they got the amounts given the nature of their income which was disproportionally less than what they subscribed as share capital would also amount to the Revenue having discharged the onus if at all which fell upon it. This Court also notices that the assessee in this case was incorporated barely few months before the commencement of the assessment year, and there is no further information, or anything to indicate why its mark up of the share premium thousand folds in respect of the shares which were of the face value of Rs. 10 lakhs was justified. 9. In view of the above discussion, this Court is of the opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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