TMI Blog2011 (12) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... money u/s 68 of the Act. 2. In this case, the assessee filed return of income declaring total income at Rs. Nil on 01.11.2004, which was processed u/s 143(1) of the Act. Subsequently, the AO issued a notice u/s 148 of the Act on 23.03.2009 for the reason that the assessee had entered into bogus transaction with several parties and introduced ₹ 1,11,50,000/- as share application money from 13 parties. In reply to the notice issued u/s 148 of the Act, the assessee submitted the return filed originally on 01.11.2004 may be treated to be a return filed in response to a notice u/s 148 of the Act. Thereafter, the AO computed the assessment u/s 143(3)/148 of the Act vide order dated 16.12.2009, wherein an addition of ₹ 55,50,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. of the parties mentioned above and asserted that the question of addition in the income of the assessee does not arise. This explanation of the assessee has been duly considered and found not acceptable. This entry remains unexplained in the hands of the assessee as has been arrived by the Investigation wing of the Department. As such entries of ₹ 55,50,000/- received by the assessee are treated as an unexplained cash credit in the hands of the assessee and added to its income. Since I am satisfied that the assessee has furnished inaccurate particulars of its income, penalty proceedings u/s 271(1)(c) are being initiated separately. 4. Being aggrieved, the assessee preferred an appeal before the ld. CIT(A). 5. Before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icants. (iv) Copy of bank a/c of the appellant. (v) Certificate of incorporation of the share applicant. (vi) Memorandum of Association of the share applicant. (vii) Copy of share application form. 6. Thereafter, the ld. CIT(A) discussed about the three basic requirements to be looked into for the purpose of proving cash credit entered into the books. In that regard, the ld. CIT(A) observed as under: - The onus of proving cash credit in the books is rebuttable. The assessee has to discharge the initial onus by proving the identity of the creditor by filing the confirmatory letter and other relevant details. The presumption is rebuttable and the Department is also required to bring evidence on record if wants to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the share application money was received through a/c payee cheques, detail of which had been filed by the appellant by filing the copy of bank a/c of the share applicants. Thus, where the return of income is filed by the creditors of the assessee and is accepted by the Department, and the payments are through a/c payee cheques the genuineness of the transaction cannot be doubted. 9. The ld. CIT(A) then made a reference to the decision of Hon ble Delhi High Court in the case of CIT Vs. M/s Stellar Investment Ltd., 192 ITR 287, and stated that the following observations of the Tribunal has been confirmed by the High Court: - It is evident that even if it be assumed that the subscribers to the increased share capital were not genu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought on record by the AO. 11. Thereafter, the ld. CIT(A) made a reference to the decision in the case of CIT vs. Divine Leasing Finance Ltd. (2007) 158 Taxman 440, CIT vs. Lovely Exports P. Ltd. 116 CTR 185 (SC), CIT vs. Stellar Investment Ltd. 2001) 251 ITR 263 (SC), CIT vs. Orissa Corporation P. Ltd. (1986) 159 ITR 78 (SC), CIT vs. Value Capital Services P. Ltd. 307 ITR 334, decision of Hon ble Delhi High Court in the case of CIT vs. Suntech Vision Ltd. (ITA No. 463/2010), CIT vs. Dwarkashis Financial Services P. Ltd. (ITA No. 439/2010 of Hon ble Delhi High Court), CIT vs. Victor Electrodes Ltd. 42 DTR 152 (Del.), CIT vs. Arunananda Textiles P. Ltd. (ITA No. 1515/2005, decided on 02.03.2010) of Karnataka High Court, CIT vs. Oasis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted by the appellant along with copy of bank accounts of the share applicants. In view of the findings above and the judicial precedents on the subject that once the identity of the share applicants were proved by the appellant, which in the instant case has not been controverted by the AO, the addition of ₹ 55,50,000/- made by the AO on account of unexplained share application money is deleted. However, the AO is free to take appropriate action as may be permissible under the law in the case of various share holders alleged to be entry providers. 12. In the course of hearing of this appeal, the ld. Departmental Representative has not been able to point out any material to rebut the findings recorded by the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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