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M/s. Goli Finance Ltd Versus Deputy CIT, Company Circle-12 (1) , New Delhi

2016 (8) TMI 1086 - ITAT DELHI

Addition on unexplained cash credit under sec. 68 - share application money - Held that:- The assessee had furnished details of the share applicants supported with some evidence. The first category was of those share applicants who had paid share application money in cash and the second category of the share applicants was those paid share applicant money through cheque. In the first category of share application, the assessee had furnished their details and confirmations by their affidavit and .....

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before the Assessing Officer and had confirmed of paying and receiving back their respective share application money from the assessee. We are thus of the view that the assessee had discharged its primary onus to establish genuineness of this category of the share applicants. Thereafter, the onus was shifted upon the Assessing Officer to dislodge the claim of the assessee by disproving those evidences and submissions made by the assessee discussed above. In absence of conducting such exercise b .....

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it was also submitted that assessee had allotted shares to these applicants. Thus, we find that the assessee had discharged its primary onus by furnishing the above evidences and submissions that shares were allotted by the assessee to them. The onus thereafter was shifted upon the Assessing Officer to rebut those evidences and submissions of the assessee to justify the addition of ₹ 7,84,000 made by the Assessing Officer on this account. Merely on the basis that cash was deposited in thei .....

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r in this regard also has failed to discharge his onus to justify the above addition of share application money paid through cheques. The Assessing Officer is thus directed to delete the addition of ₹ 7,84,000. In total, the addition of ₹ 16,11,500 (Rs.8,27,500 + ₹ 7,84,000) is directed to be deleted. - Decided in favour of assessee. - ITA No. 3789/Del/2013 - Dated:- 26-7-2016 - SHRI I.C. SUDHIR AND SHRI PRASHANT MAHARISHI For The Assessee : Shri P.C. Yadav, Adv. For The Depart .....

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uments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon. 3. The facts in brief are that assessee a company is engaged in the business of leasing, finance and hire purchase. The assessee being a nonbanking finance company is bound to follow mandatory guidelines issued by RBI regarding the classification of assets, recognition of income and norms for making provisions. The assessee contended that as per guidelines issued .....

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0 under sec. 68 of the Act on account of unexplained cash credits. Learned CIT(Appeals) has upheld the same. 4. In support of the ground, the Learned AR submitted that the assessee company is duly registered with Reserve Bank of India as a non-banking financial company and is authorized to accept cash from public at large. The transaction in question is pure and simple case of receipt of share application money during the normal course of business. There is no material on record even to assume t .....

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,76,000 was received via banking channel. Out of the amount of ₹ 21,76,000, the Assessing Officer doubted the credit of ₹ 7,84,000 and added the same under sec. 68 on the ground that before the issuance of cheque from these accounts, cash was deposited in these accounts. The Learned AR submitted that against the receipt of share application money in cash, the assessee had filed affidavits and fan of the parties, details of which have been made available at page No. 57 of the paper bo .....

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on money before this date. He submitted that though the assessee had refunded the money in next financial year yet the money was refunded before the commencement of assessment proceedings of the impugned year. He submitted that the Assessing Officer had not brought any material on record to establish that the documentary evidences submitted by the assessee vis-à-vis refund of share application money are false. The Assessing Officer very conveniently ignored the affidavits of the parties a .....

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parties, their income-tax returns and bank statements. The assessee had also allotted shares to these persons and they were the owners of the shares. The authorities below have denied the claim of the assessee regarding these share applicants on the basis that the cash was deposited in their respective accounts immediately before the receipts of share application money. Learned AR in this regard placed reliance on the decision of Hon'ble jurisdictional High Court of Delhi in the case of CIT .....

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y Matters Pvt. Ltd. - ITA No. 7778/2015 (Delhi) - order dated 13.10.2015; iii) CIT vs. Shiv Dhooti Pearls & Investment Ltd. -ITA No. 429/2003 - order dated 21.12.2015 (Delhi High Court) iv) Oswal Pumps Pvt. Ltd.. vs. ITO - ITA No.1480/Del/2013 (A.Y. 2004-05) - order dated 31.3.2015; 4.2 The Learned Senior DR on the other hand placed reliance on the orders of the authorities below. He submitted that the share application money has been deliberately has been kept below ₹ 20,000 per share .....

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having meager income. He submitted that out of 19 share applicants, only in seven cases, income-tax returns were given. HE submitted further that identical amount was deposited in the accounts of share application before issuance of cheques by them to the assessee. He placed reliance on the following decisions: i) CIT v. P. Mohanakala [2007] - 291 ITR 278 (SC); ii) CIT Vs. Navodaya Castles Pvt. Ltd.; 367 ITR 306- (Del.); & iii) CIT vs. Empire Buildtech P. Ltd. (2014) -366 ITR 110 (Del.). 4. .....

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e. share applicants in the present case. In the present case, the assessee had furnished details of the share applicants supported with some evidence. These are two categories of the share applicants in the present case. The first category was of those share applicants who had paid share application money in cash and the second category of the share applicants was those paid share applicant money through cheque. In the first category of share application, the assessee had furnished their details .....

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assessment proceedings, they had appeared before the Assessing Officer and had confirmed of paying and receiving back their respective share application money from the assessee. We are thus of the view that the assessee had discharged its primary onus to establish genuineness of this category of the share applicants. Thereafter, the onus was shifted upon the Assessing Officer to dislodge the claim of the assessee by disproving those evidences and submissions made by the assessee discussed above .....

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