TMI Blog2011 (7) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... ties and genuineness of transaction in terms of Section 68 of the IT Act. 4. Before the Ld. Commissioner of Income Tax (Appeals), assessee filed documents pertaining to share applicants. The Ld. Commissioner of Income Tax (Appeals) sent those documents to the Assessing Officer and obtained a Remand Report. Learned CIT(A) held as under:- 4.6.4 As regards appellant s contention on merits, it can be seen that, while passing the impugned order, the assessing officer made addition of ₹ 35,00,000/- u/s 68 on account of share application money received from different subscribers and this amount of ₹ 35,00,000/- represents the difference in the opening and the closing balance of the share capital. Definitely the assessing officer has overlooked the ratios of the case of CIT vs. Lovely Exports Pvt.Ltd. (supra) wherein the Hon ble Apex Court, while answering the question that Can the amount of share money be regarded as undisclosed income u/s 68 of IT Act, 1961 held that if the share application money is received by the assessee company from alleged bogus shareholders whose names are given to the AO, then the Department is free to proceed to reopen their individual asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant s hand. In the case of Addl.CIT vs. Hanuman Pd.Aggarwal 151 ITR 151 (Patna) it was held that assessee having furnished the correct name and address of the creditor, having confirmatory letter from the creditor and all materials show prima facie not only identity of the creditor but also the genuineness of the transaction, no adverse inference can be drawn. Reference can also be made to the judgement of Hon ble Apex Court in the case of Steller Investment Ltd. (2001) 251 ITR 263 (SC), wherein it was held that even if the subscribers to the increased share capital of assessee company were not genuine, the amount could not be regarded as undisclosed income of the assessee company. The above view point of the Hon ble Apex Court has also been expressed by Jurisdictional Delhi High Court in the case of Divine Leasing Finance Ltd. (2008) 299 ITR 268 (Del), A-One Housing Complex Ltd. vs. ITO 110 ITD 361 (Del), CIT vs. Value Capital Service Pvt.Ltd. 307 ITR 334 (Del) and CIT vs. General Exports and Credits Ltd. (2008) 299 ITR 268 (Del). In the case of CIT Vs. The Hon'ble Delhi High Court in the case of CIT vs. Divine Leasing Finance Ltd. (supra) has laid down the law on the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identity of the share subscribers. In view of above, it is clear that the appellant has discharged the initial onus of establishing the identity of the subscribers and the bonafides of the transactions hence the assessing officer is not justified in ignoring various evidences provided to him by the appellant. Nothing adverse has been brought on record by the assessing officer to establish that the amount of share application money received by the appellant from the above mentioned different persons represents its own undisclosed income. In view of our aforesaid discussion, I direct the assessing officer to delete the addition of ₹ 35,00,000/- made u/s 68 of the Act. 4.1 The learned CIT(A) further held that since the addition of `35 lakhs has been deleted, the addition for commission of ₹ 87,500/- also stands cancelled. Against the above order, Revenue is in appeal before us. 5. We have heard the rival contentions in the light of materials produced and precedents relied upon. We find that the assessee in this case has duly filed copies of share application forms. The names and addresses, PAN, bank details and confirmations of the investors have been filed, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Jurisdictional High Court in the case of C.I.T. vs. Dwarkadish Investment P Ltd. The relevant paras of this judgement of Hon ble Delhi High Court i.e. para No. 6, 7 8 are reproduced herein below:- 6. In our opinion, as section 68 of the Act, 1961 has been interpreted as recently as 2008 by a Division Bench of this Court in Divine Leasing and Finance Ltd. (Supra) after considering all the relevant judgements, we do not have to reconsider all the judgements referred to by Mr. Sahni which are prior in date and time to the aforesaid judgement. In fact, a Special Leave Petition filed against the said Division Bench Judgement was dismissed by the Supreme Court by way of speaking order in C.I.T. vs. Lovely Exports (P) Ltd. 216 CTR 195 (SC). The Supreme Court in Lovely Exports Pvt. Ltd. (Supra) has held as under:- Can the amount of share money be regarded as undisclosed income under section 68 of the Income Tax Act, 1961. We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the Department is free to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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