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TMI Blog2015 (2) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... es under Section 68 of the Income Tax Act, 1961 (hereafter referred to as "the Act"). 2. During AY 2003-04, the assessee had received Rs. 1.65 crores as share application money from three concerns, i.e. M/s. Richie Rich Overseas Private Limited (Rs.75 crores); M/s. Goyal Textiles Industries Pvt. Ltd. (Rs.60 lakhs) and M/s. Ankur Distributors Pvt. Ltd. (Rs.30 lakhs) (hereafter referred to as "the share applicants"). These three amounts were returned by the assessee in the succeeding financial year 2004-05. It is a matter of record that the amounts were retained by the assessee for about 3-4 months. The AO disallowed the entire amount of Rs. 1.65 crores on the basis of his decision that the three entities, i.e. the share applicants did not h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A perusal of expenses claimed, refute the observation of the AO that they were merely statutory expenses. The bank statement showed transfer entries in Mahan Enterprises Ltd. by way of cash deposit, and debit by issue of cheques to the concerns for routing the money. The AO, therefore, treated the credits as unexplained and made addition of Rs. 1.65 crores. The AO has not discussed any documentary evidences in the assessment order/Remand Report except giving the particulars of bank transactions of Mahan Enterprises Ltd. and so called intermediaries. The balance sheet of the creditors shows that they had sufficient funds. In case of M/s. Goyal Textiles Pvt. Ltd. the balance sheet shows paid up capital of Rs. 5.00 crores. The funds have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been found to be persons of no means 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." 3. The CIT(A) thereafter observed as follows: 4. The ITAT, to which the Revenue appealed, was unimpressed by the submissions made before it and accordingly rejected the contentions. In the present case, learned counsel for the Revenue highlighted that the AO had clearly noticed that there was hardly any business transacted by the share applicants which could have legitimately allowed them to invest large sums of money in the assessee's shares. It is also contended that merely because the share applicants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bly sized turnovers. In these circumstances, to establish implausibility on the part of the share applicants to have possessed the means when they applied, the AO ought to have probed further. He did not do so as is evident from the Remand Report where the AO did not offer any comments upon the materials taken into account by the CIT (Appeals). Consequently, the ITAT's order cannot be faulted. 6. So far as the second amount of Rs. 1,18,50,000/- is concerned, the ITAT noticed as follows: "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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