TMI Blog2016 (9) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... ari Lal Sharma, JJ. For the Appellant : Anuroop Singhi For the Respondent : Naresh Gupta JUDGMENT K. S. Jhaveri, J. 1. By way of this appeal, the department has assailed the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal preferred by the assessee and reversed the finding of the Commissioner of Income-tax (Appeals) and the Assessing Officer. 2. Brief facts of the case, the assessee is engaged in business in manufacturing of AC Pressure Pipes and Sheets. During the survey operation carried out at the business premises of the assessee on July 18, 2011, it was revealed that the assessee has received bogus share application money of ₹ 2.50 crores from 7 different companies, which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing questions of law which reads as under : (i) Whether in the facts and circumstances of the case, the Tribunal was justified in reversing the order passed by the Commissioner of Income-tax (Appeals) and the Assessing Officer, thereby, deleting the addition of ₹ 2,50,00,000 made under section 68 of the Act, even when the assessee failed to establish the identity, genuine ness and creditworthiness of the share applicants ? (ii) Whether the order passed by the Tribunal in not treating the subscription of the share capital by alleged bogus shareholders as unexplained cash credit of the assessee is legally sustainable, more so, when no finding to prove identity, genuineness and creditworthiness of the share applicants has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, the assessee cannot be forced to prove the source of the source. The law on this subject is also settled by numerous decisions. The alleged report of the Inspector of the Department who is stated to have visited at the given address of the share applicants was never put or confronted to the assessee. The cumulative effects of these reasons is that the impugned addition cannot be added in the hands of the assessee-company. Accordingly, we order to delete the entire additions and allow the appeal of the assessee. 6. In our view, the decision of the Supreme Court in the case of CIT v. Lovely Exports P. Ltd. reported in [2009] 319 ITR (St.) 5 (SC) held as under : Can the amount of share money be regarded as undisclosed income unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able it to be treated as the undisclosed income of the assessee. In the absence of such findings, addition could not be made in the income of the asses see under section 68 of the Act. 9. We have heard Mr. Anuroop Singhi counsel for the appellant and Mr. Naresh Gupta counsel for the respondent. 10. Taking into consideration the observations made by the twin decisions as observed by the Tribunal that all the share applicants stand identified. The assessee has provided permanent account numbers of the share applicants. The mode of payment has also been explained. There is no direct or indirect relation between the assessee-company and the share applicants. The statements recorded during survey has got no evidentiary value without any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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