TMI Blog2016 (10) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... eal challenging the order dated 12.12.2011 passed by Ld CIT(A)-8, Mumbai for assessment year 2008-09, wherein the Ld CIT(A) has confirmed the addition of Share Application money of ₹ 96.00 lakhs made by the AO u/s 68 of the Act. 2. The assessee received share application money aggregating to ₹ 96.00 lakhs during the year under consideration from the following persons:- a. M/s Spider Web Solutions Ltd Rs.24.00 lakhs b. M/s Saragossa Investment Finance Rs.24.00 lakhs c. M/s Komal Commercial Ltd Rs.24.00 lakhs d. M/s Larite Industries Ltd Rs.24.00 lakhs The assessing officer made enquiries about the Share application money receipts, referred above, in terms of sec. 68 of the Act and the same has been narrated as under by Ld CIT(A):- 2.3 The appellant had filed the confirmations from the above mentioned parties during the course of assessment proceedings. The A.O. found on perusal of the confirmations furnished on record that the confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rite Industries Ltd. and Shri Chandresh Shah Director of Saragossa Investment Finance Ltd. and the remaining two address were not found and therefore summons could not be served by the inspector. Even the address given in the affidavits were not correct and therefore the parties could not be located by the inspector. Thereafter the summons were issued and sent through posts which were returned back unserved. Information was also collected from the banks in which these four companies had their bank accounts and through which the cheques were given to the appellant. The assessing officer also collected account copies of share applicants from their respective bank accounts and noticed that some accounts were closed subsequently. Further the closing balance available in those accounts were small amounts, even though there was deposits and withdrawals of huge amounts. 3. In view of the above, the AO finally concluded as under:- From the above discussion, it is held as under:- (i) Most of the addresses given of these companies appear to be fake. (ii) The business of all the four companies appears to be providing accommodation entries. (iii) The frequency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has furnished all the details relating to the share application money. He submitted that there is no information with the assessee that these companies are providing accommodation entries. He submitted that these companies are existing for a quiet for a long time and they have made investments in several other companies, besides the assessee. He submitted that the assessee has furnished the copies of their incorporation certificate, PAN details, the Annual report and income tax returns. He submitted that the share application money was given by the applicants by following proper procedure through banking channels. He submitted that the assessee could not prevail upon the share applicants and their directors to co-operate with the assessing officer and their non-cooperation should not have been considered to take adverse view against the assessee. He submitted that the assessee has fully discharged the initial burden of proof placed upon it u/s 68 of the Act and accordingly submitted that the impugned addition is liable to deleted. 6. On the contrary, the ld D.R submitted that the assessee did not offer proper explanation for non-appearance of share applicants and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh banking channels. In fact, the AO himself has verified the same by calling for account copies from the respective bank accounts. Hence the genuineness of the transaction also stands proved. A perusal of the Balance Sheet furnished by all the Share applicants show that they have made impugned investments out of their own funds only. The following table clarifies this position:- Name of Share Applicant Investment Own Funds a. M/s Spider Web Solutions Ltd Rs.24.00 lakhs 200 lakhs b. M/s Saragossa Investment Finance Rs.24.00 lakhs 250 lakhs c. M/s Komal Commercial Ltd Rs.24.00 lakhs 406 lakhs d. M/s Larite Industries Ltd Rs.24.00 lakhs 248 lakhs All the share applicants are also regularly filing return of income and the assessee has furnished copies of returns of income filed by them. It is seen that these companies have made othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prevailing in the present case is somewhat similar to the facts prevailing in the case of Hospitalities (P) Ltd (supra). The relevant discussions made by Hon ble Delhi High Court in the case of Nova Promoters Finlease (P) Ltd (supra) are extracted below:- 40. Reference was also made oil of the assessee to the recent judgment of a Division Bench of this court in CIT v. Hospitalities (P.) Ltd. [2011] 333 ITR 119/ 198 Taxman 247. We have given utmost consideration to the judgment. It disposes of several appeals in the case of different assessees. Except the case of Oasis Hospitalities (P.) Ltd (supra), the other cases fall under the category of Orissa Corporation (P) Ltd. (supra). However, in the case of Oasis Hospitalities (P.) Ltd., there is reference to information received by the Assessing Officer from the investigation wing of the revenue on the basis of which it was found that six investors belong to one Mahesh Garg Group who were not carrying oil real business activity and were engaged in the business of providing accommodation entries. They were entry operators and the assessee in that case was alleged to be a beneficiary. While disposing of these appeals, this court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajan Jassal. Thus, on crucial factual aspects the present case stands on a completely different footing from the case of Oasis Hospitalities (P) Ltd (supra). 12. The facts prevailing in the present case are different. There is no allegation that the share applicants herein are entry operators/accommodation providers. There is no report from the Investigation wing to that effect. We have noticed that the assessee has provided all the information in order to discharge the initial burden placed upon it u/s 68 of the Act. Further these companies have been incorporated long back as detailed below:- Name of company Date of Incorporation a. M/s Spider Web Solutions Ltd 14-07-1992 b. M/s Saragossa Investment Finance 20-07-1992 c. M/s Komal Commercial Ltd 26-12-1997 d. M/s Larite Industries Ltd 28-03-1985 In our view, these companies cannot be considered to be the types of flight by night operators, since ..... X X X X Extracts X X X X X X X X Extracts X X X X
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