TMI Blog2010 (1) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the assessing officer made an addition of ₹ 50,90,000 contributed by the following persons as share capital of the assessee company: 1. Ramalinga Raju Rs.23 lakhs 2. J. Krishna Rao Rs.15.95 lakhs 3. Smt. Jeevitha Mala Rs.7 lakhs 4. Shri Sivarama Raju Rs.5 lakhs The addition was made on the grounds that identity and creditworthiness of the investors in the share capital application money is not proved. On appeal, the CIT(A) called for remand report from the assessing officer and wherein the remand report, the assessing officer failed to point out any reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or/subscriber, the genuineness of the transaction and the veracity of the repudiation. 4. We have heard both the parties and perused the material on record. In the present case, the CIT(A) called for Remand Report from the assessing officer. The assessing officer sent the remand report vide reference No.ITO.3(2)/RR/9/10 dated as follows: i) As seen from the Affidavit filed by Shri D. Ramalinga Raju, the entire amount of ₹ 23,00,000 has been invested in the company by way of transfer from his bank account. On perusal of the said bank account, it is seen that there are instances of cash deposits into his bank account on the day the transfer was affected. Shri D. Ramalinga Raju submitted the details of the sources for the cheques a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. 5.2 In the case of CIT Vs. Sophia Finance Ltd. (205 ITR 98) Delhi (Full Bench), wherein it was held that for the operation of section 68, it would be immaterial whether the amount is credited in the books in the share application money account and it was held that S.68 is applicable in respect of share application money. 5.3. In the case of CIT Vs. Lovely Exports (216 ITR 195) (SC), wherein it was held that even if the share application money is received by the assessee company from the alleged bogus share holders whose names are given to the assessing officer, then the department is free to proceed their individual assessment in accordance with law but it cannot be regarded as undisclosed income of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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