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2015 (11) TMI 61 - ITAT MUMBAI

2015 (11) TMI 61 - ITAT MUMBAI - TMI - Addition u/s 68 - CIT(A) deleted the addition - Held that:- The assessee has discharged its primary onus by establishing identity and creditworthiness of the share holders. The transactions stood confirmed also, on the basis of confirmation letters of all these share holders. The AO doubted the genuineness by relying upon some statements which were not recorded by the Assessing Officer. The statements relied by ld. Assessing Officer were not tested in the a .....

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negate the documentary evidences furnished by the assessee. In view of the peculiar facts and circumstances of this case, order of ld.CIT(A) is upheld. - Decided against revenue. - ITA. Nos. 2117 & 2118/Mum/2014, ITA. No. 2160/Mum/2014, ITA. No. 2116/Mum/2014, ITA. No. 2157/Mum/2014, ITA. No. 2119/Mum/2014 - Dated:- 28-9-2015 - SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER. For The Revenue : Shri Chandra Vijay, D.R. For The Assessee : Dr. P. Daniel, A. .....

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e case and in law, the Ld. CIT(A) erred in deleting the addition of ₹ 35,00,000 / - made under section 68 of the I.T. Act in respect of share application money without appreciating the fact that addition was bases on specific information provided by the Investigation Wing of Income Tax Department that investor companies had issued cheques towards the alleged share application money in return of cash." 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erre .....

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case are that assessee is engaged in the business of financial services. Assessee received share capital subscription of ₹ 35 lacs from M/s. Sonal Cosmetics (Export) Ltd., M/s. Gabriel Investment P. Ltd., M/s. Jaihind Synthetics Ltd., M/s. Sonal Silichem Ltd. and M/s. Mihir Agencies P. Ltd. These companies were floated by Mr. Mukesh Choksi. He along with all related concern was searched by Investigation Wing. The said Mukesh Choksi and Mr. Jayesh Sampat, admitted before DIT(Inv.) that comp .....

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f reopening which is not issue before us. On merit, CIT(A) allowed the appeal following various case laws on the point. Same has been opposed before us, inter alia submitting that CIT(A) was not justified in deleting the addition of ₹ 35 lacs made u/s.68 of Income Tax Act in respect of share application. Without appreciating the fact that addition was based on specific information provided by the Investigation Wing of Income Tax that investor companies had issued cheques towards the allege .....

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titrade Pvt. Ltd. in ITA Nos. 2158 & 2159/Mum/2014 for A.Ys. 2007-08 & 2008-09. ITAT, Mumbai E Bench in case of M/s. SDB Estate Pvt. Ltd. vs. ITO in ITA No.584/M/2015 for A.Y. 2008-09 and ITAT, Mumbai Bench in case of Smt. Jyoti D. Shah vs. ITO in ITA No. 1843/Mum/2012 for A.Y. 2003-04. In this background, learned Authorized Representative submitted that order of CIT(A) be upheld. 5. After going through rival submissions and material on record, we find that assessee has received share ap .....

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he assessee s case u/s.148 and added the share application money u/s.68 of the Income Tax Act. In similar facts and circumstances, where these shareholders have invested money in corporate entity as share application money, the ITAT, Jaipur Bench in case of Charti Syntex Ltd. vs. DCIT in ITA Nos. 172 & 173/Jp/2010 has held in para 24.4 as under: 24.4 In this case also no cross examination was allowed to the assessee. Therefore, adverse inference cannot be drawn only on the statement of Shri .....

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osed of the appeal for asst. yr. 2005-06 whereby we have held that the assessee has discharged its onus by filing necessary details and further have relied on the decisions of Hon'ble Supreme Court and Hon'ble Delhi High Court along with various other decisions of Tribunal and have held that addition cannot be made under s.68 in the hands of the assessee company. Therefore, in view of the same reasoning, we cancel the entire addition made and confirmed by the lower authorities here also. .....

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are holders instead of adding the amount u/s.68 of the Act in the hands of assessee company. This view has been upheld by Hon ble Bombay High Court in case of CIT vs. Creative World Telefilms Ltd. (2011) 333 ITR 100 (Bom) by observing as under: 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 can always proceed against them and if necessary reopen their individual assessments. H .....

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TR 308 (SC) has held as under: If the share application money is received by the assessee company from alleged bogus share holders who s name are given to the AO then the department is free to proceed to reopen their individual assessments in accordance with law but it cannot be regarded as undisclosed income of assessee company. 6. Coming back to the facts of the present case, it is seen that investment in the capital share of the assessee company was made by five companies. These companies exi .....

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s. Thus, creditworthiness of these share holders was also established. It is noted from the record that following evidence have been furnished by the assessee with respect to each of the share holders. -Memorandum and Article of Association -Copy of ROC Form No.-2 (alongwith details of share application and share allotment) -Copy of Audited Balance Sheet full set. -Copy of the Confirmation letter -Copy of PAN Card and -Copy of IT acknowledgment evidences filing of return -Copy of Balance Sheet. .....

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cross examination was provided by the Assessing Officer to the assessee before using these statements against the Assessing Officer. Following submissions have been made before us, in support of the claim made by the assessee:- (i) The share application form is the confirmation of the share applicant. The share allotment in compliance of Companies Act 1956 in Form NO.2 is factually evident of the share capital. (ii) Funds of the share capital subscription are through banking channel and reflect .....

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f Mr. C. Choksi Group recorded by the IT Department. In view of these peculiar facts and circumstances, we find that the assessee discharged its onus as per law, as stipulated section 68 of the Act. On the other hand, the Assessing Officer was not in position to controvert the factual material and documentary evidences placed by the assessee and he could not bring anything contrary on record to negate the documentary evidences furnished by the assessee. In view of the peculiar facts and circumst .....

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