TMI Blog2016 (3) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) of the Act. Ld AO found there is meager balance in the bank account of that company after issue of the cheques of share application to the assessee. It is not the case of the AO that money that has been deposited with the assessee company which is not properly explained. We failed to understand how the remaining meager bank balance in the bank account of share applicants can affect the transaction entered into by the share applicants with the assessee company. Further the late allotment of shares made by assessee to the share applicant may result in to some contravention of the Companies Act 1956 however that cannot be used for making an addition u/s 68 of the act as same is irrelevant. The ld DR could not controvert any of the findings given by the learned Commissioner of Income-tax (Appeals) and no infirmity was pointed out. In view of the above we confirm the order of the learned Commissioner of Income-tax (Appeals) for deleting the addition made u/s 68 of the Act - Decided in favour of assessee - ITA No. 3982/Del/2010 - - - Dated:- 25-1-2016 - SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Appellant : Sh. V.K. Tulshiyan, CA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Peals Infosoft (P) Ltd. 3,00,000/- 6. G. T. Infotech (P) Ltd. 3,00,000/- 7. eDynamics Solutions (P) Ltd. 10,00,000/- 8. Techno Soft Infosystems (P) Ltd. 4,00,000/- 9. CVH Sea Lifes Ltd. 4,00,000/- 10. Nipun Infotech (P) Ltd. 4,00,000/- 11. Garg Finvest (P) Ltd. 5,00,000/- 12. Sparrow marketing (P) Ltd. 5,00,000/- Total Share application money 58,00,000/- 5. Discharge its onus the assessee submitted list of share holders of the company as well as the confirmation of all the share applicants along with their audited financial statements, Their bank Account statement and copy of the income tax return of those parties. Further the assessee also submitted the print out of the data obtained by them from the web-site of the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 195 (SC) cannot be extended to this situation whether accommodation entry profits make investment in the assessee company and further the decision of the Hon ble Supreme Court is not applicable whether share applicants money is not received in public issue. 7. Against this the ld AR submitted that evidence are submitted before the AO in case each of the share applicants showing their confirmation from return of income, balance sheet, their certificate of incorporation and their bank statement. After showing us all these documents it was submitted that the assessee has fully discharged its onus cast upon it u/s 68 of the Act. Though notice u/s 133(6) came back un-serviced the assessee persuaded and in turn those parties filed their confirmation before the AO independently. After that there is no enquiry made by the AO. Hence in the above circumstances the addition u/s 68 cannot be made. Further the assessee advanced his argument and submitted that the decision of the Hon ble Delhi High Court in the case of CIT Vs. Vrindavan Farms (P) Ltd. in ITA No.71 72 of 2015 order dated 12th August 2015 covers the issue in favour of assessee wherein on the identical facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO during the assessment proceeding. It had also been argued before the AO that the material collected at the back of the assessee cannot be used against the assessee unless opportunity of cross-examination is provided. As per the assessment order, the AO issued notices u/s 133(6) to the investor companies which came back unserved and as per the Inspector's report such companies were also not found to exist at the said addresses. On this, it is argued by the Id. AR that the assessee was not in a position to produce the Principal Officers and the said companies had independently furnished confirmation regarding share application money along with necessary documents directly with the AO. argued that since the share application money had been received from corporate entities, the said amounts cannot be added in the hands of the appellant company, even the shareholders are alleged to be bogus. The Id. AR has accordingly argued that the said addition of ₹ 58,00,000/- u/s 68 is illegal. The Id. AR has relied upon a plethora of case laws in support of his claim. On careful consideration of the matter, the above contention of the Id. AR is found to be factually correct. 6.1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of R.B. Shreeram Durga Prasad 176 ITR 169 (SC), 125 ITR 713 (SC), Jindal Vegetable (order of Hon ble Delhi High Court in ITA no. 428 of 2007, 174 Taxmann 440 (Raj.) and Laxman Bhai Patel (order of Hon'ble Gujarat High Court dated 22.07.2008 in ITR no. 41/1997). 6.1.4. Further, in the case of NP. Garodia (order dated 13.01.2009 of Hon'ble P H High Court in ITA no. 808 of 2008) and in the case of Brij Pal Sharma (order dated 17.02.2009 in ITA no. 685 of 2008 of Hon'ble P H High Court) it was held that where the assessee provides identity and details pertaining to the lenders/creditors and is unable to produce them and requests the AO to issue summons u/s 131 for their attendance, it is the duty of the AO to issue such summons, failing which the addition would get deleted. It is also held in CIT v. Orissa Corporation Pvt. Ltd. 158 ITR 78 (SC) and Anis Ahmed 297 ITR 441 (SC) that mere non-production of the lender/shareholder cannot be a ground for making addition u/s 68. 6.1.5. Similarly as held in the case of CIT v. Metachem Industries (2000) 245 ITR 160 (MP) where a credit is shown to have come from a person other than the assessee, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, it is not disputed that the assessee has given the details of name and address of the shareholders, their PAN/GIR number and had also given the cheque number, name of the bank. It was expected on the part of the assessing officer to make proper investigation and reach the shareholders. The assessing officer did nothing except issuing summons which was ultimately returned back with an endorsement 'not tenable'. In our considered view, the assessing officer ought to have found out their details through PAN Card, Bank Account details or from their bankers so as to reach the shareholders since all the relevant material details and particulars were given by the assessee to the assessing officer. In the above circumstances, the view taken by the Tribunal cannot be faulted. No substantial question of law is involved in the appeal. In the result, the appeal is dismissed in liminni with no order as to costs. Similar decision has also been taken by the Hon'ble Chhattisgarh High Court in ACIT v Venkateswar Ispat Pvt. Ltd. (2009) 319 ITR 393. 9. Further Though notice u/s 133(6) is issued by the AO could not be served on the share applicants and Inspector s report a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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