TMI Blog2010 (8) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... s in law and in facts is prayed to be directed to be deleted. (2) The ld. CIT(A)-VI, Baroda has erred in law and in facts in confirming the action of the AO in disallowing an amount of ₹ 3,00,000/- out of salary paid to relatives of the Directors, in complete disregard to the available facts and law. Therefore, the claim as made by the appellant, is prayed to be allowed. 2. The facts of the case are that the company is engaged in the business of manufacturing of Glass Frit Glaze Mixture. The assessee filed return of income declaring an income of ₹ 7,15,107/-. During the course of assessment proceedings the AO found that assessee has received share application money from 15 persons totaling to ₹ 20,,48,500/-. The de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation about a cash credit found in his books is rejected. 5.4.1 It is necessary for the assessee to prove prima face the transaction which results in a cash credit in his books of account. Such proof includes proof of the identity of his creditor, the capacity of such creditor to advance the money and, lastly, the genuineness of the transaction. These things must be proved prima facie by the assessee and only after the assessee has adduced evidence to establish prima facie the aforesaid, the onus shifts on the department. Merely establishing the identity of the creditor is not enough [Shankar Industries vs. CIT (1978) 114 ITR 689 (Cal); C. Kant Co. vs. CIT (1980) 126 ITR 63 (Cal); Prakash Textile Agency vs. CIT (1980) 121 ITR 890 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20,48,500/- have been justifiably added by AO to the total income. 4. Against this the ld. AR for the assessee submitted that once it is admitted fact that assessee has received share application money and subscribers have admitted to have subscribed into the share capital and no further enquiries are required to be made. He referred to various decisions of the Courts including that of Hon. Apex Court in CIT vs. Lovely Exports (P) Ltd. (2008) (ITI)-GJX-0181 (SC). In fact Hon. Delhi High Court had decided the issue in CIT vs. M/s Divine Leasing Finance Ltd. (2009) 299 ITR 268 (Del). In CIT vs. Lovely Exports (P) Ltd. (supra) SLP filed by the Department has been dismissed by Hon. Apex Court and the decision of Hon. Delhi High Court wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon. Apex Court in CIT vs. Lovely Exports (P) Ltd. (supra) as under :- Can the amount of share money be regarded as undisclosed income under s.68 of IT Act, 1961? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus share holders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgment. Subject to the above, Special Leave Petition is dismissed. Respectfully following the above decisions we hold that once identities of the subscribers are established and they confirm to have paid ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
