TMI Blog2016 (2) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Hon’ble Apex Court in the case of CIT vs Lovely Exports (P) Ltd reported in (2008 (1) TMI 575 - SUPREME COURT OF INDIA ) is very well founded, wherein, it has been very clearly held that the only obligation of the company receiving the share application money is to prove the existence of the shareholders and for which the assessee had discharged the onus of proving their existence and also the source of share application money received. - Decided against revenue - ITA No. 632/Kol/2011 A.Y: 2007-08 - - - Dated:- 20-1-2016 - Shri M.Balaganesh, Accountant Member, and Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant: Shri Pinaki Mukherjee, JCIT, ld.DR For The Respondent: None appeared ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is an agro based company and most of the share applicants were residing in rural areas, were having only agricultural income and not provided with banking facility and do not have taxable income under the Act. The assessee stated that the list of shareholders representing Return of Allotment in Form No.2 was duly filed with the Registrar of Companies. Certain share applicants were also produced before the Learned AO together with their respective identity and address proof. Equity Share Capital ₹ 10,00,000/- The Learned AO observed that the shares were allotted to Sri Ranjit Kr. Baidya (Managing Director) , Sri Sujit Baidya (Director), Ms. Swapna Baidya, Kaushik Baidya, Dipayan Roy, Chandana Baidya and Alak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and their sources of funds were not proved to prove the genuineness of transactions. The Learned AO accordingly observed that the assessee had not proved the identity and creditworthiness of share applicants and had not established the genuineness of transactions and hence the monies received by the assessee company in the guise of subscription of preference share capital is to be treated as unexplained cash credit u/s 68 of the Act. Advance Preference Share Capital ₹ 25,00,000/- The Learned AO observed that the assessee had received sum of ₹ 25,00,000/- from 744 persons in cash as advance for preference share capital by the assessee. On obtaining the details of the names and addresses of the share applicants, the Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultural activities. In some cases, the parties were living in remote villages in Sunderbans area and hence the postal department had returned the notices unserved. Certain parties like Sri Nirmal Patra, Sukdev Das, Bhupal Joddar, Manoranjan Monda, Bishnupada Sarkar and Niranjan Sarkar came personally to meet the Learned AO and submitted their reply. However, the Learned AO chose not to take any deposition from them. The assessee stated that the creditworthiness of the subscribers cannot be doubted because all of them are agriculturists and they have all contributed small amounts in cash towards share subscription. The assessee company had issued share certificates to all of them wherever shares are allotted in the asst year under appeal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuineness and creditworthiness. 3. Ld. CIT(A) erred in appreciating the feasibility of receiving such huge amount of share capital by a newly formed company from 1581 persons by cash within a very short period. 5. The Learned DR prayed for set aside of this issue to the file of the Learned AO to enable the Learned AO to verify the share subscribers in full. 6. We have heard the Learned DR and when the case was called on for hearing , none was present on behalf of the assessee. However, we find from the file that the assessee had filed a detailed paper book and written submissions. Hence the case is disposed off based on the arguments of the Learned DR and written submissions and paper book already available on record. The fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing black money into white money or accounted money and the Ld. CIT(A) ought to have held that the assessee had not established the genuineness of the transaction. Held After hearing the learned counsel for the appellant and after going through the decision of the Supreme Court in the cases of CIT vs M/s Lovely Exports Pvt Ltd, we are at one with the tribunal below that the point involved in this appeal is covered by the said Supreme Court decision in favour of the assessee and thus, no substantial question of law is involved in this appeal. The appeal is devoid of any substance and is dismissed. 6.2. We find that the issue is also covered by the decision of Hon ble Delhi High Court in the case of CIT vs Value Capital Services P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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