TMI Blog2005 (4) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... terial has been brought on record except inferring that the investors in the opinion of the Assessing Officer were not creditworthy to link the assessee with such investment of money made by those persons. – Held that Merely because the creditors have tailed to prove their source of investment, the same cannot be added in the income of the assessee but it ought to be added by finding persons who had their names. – Revenue appeal dismissed - - - - - Dated:- 13-4-2005 - Judge(s) : RAJESH BALIA., DINESH MAHESHWARI. JUDGMENT The judgment of the court was delivered by Rajesh Balia J.- We have heard learned counsel for the appellant. This appeal under section 260A of the Income-tax Act, 1961, is against the order dated May 20, 2004, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isputed, their investment in the company was doubted and the same was not accepted as deposit genuinely made by those persons. Thus, considering the amount of share capital received by the assessee as unexplained cash credit, Rs. 5,10,000 were added as income of the assessee from undisclosed source. These additions were affirmed by the Commissioner of Income-tax (Appeals) on the very same ground. The Tribunal held that Rs. 5,80,000 is a share capital, the investors are genuinely exercising powers, the shareholders had filed confirmation letters of such investment and their statements were also recorded, no addition could be made of such sum as unexplained cash credit and the additions were deleted. Reliance was placed by the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the share application money shown in the accounts books of the assessee. We are of the opinion that the findings reached by the Tribunal are findings of fact and are in consonance with the Bench decision of the Delhi High Court ([1991] 192 ITR 287) affirmed by the Supreme Court in the case of Steller Investment Ltd. [2001] 251 ITR 263, and also on principle accepted by another decision in CIT v. Sophia Finance Ltd. [1994] 205 ITR 98 (Delhi) [FB]. The finding recorded by the Tribunal did not go beyond the purview of the findings of fact. A Division Bench of this court in CIT v. Shree Barkha Synthetics Ltd. [2004] 270 ITR 477, of which one of us was a member, had occasion to deal with the like question relating to the credit standing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the persons who are alleged to have really advanced the money is sought to be reopened, that would have made some sense but we fail to understand as to how this amount of increased share capital can be assessed in the hands of the company itself." This decision of the High Court has since been affirmed by the Supreme Court in CIT v. Steller Investment Ltd. [2001] 251 ITR 263, showing its complete agreement with the decision. In this connection, it is apposite to observe the issue before the Supreme Court in the case of Sophia Finance Ltd. [1994] 205 ITR 98 (Delhi) [FB]. In this case, the assessee's income was credited before the filing of the Revenue notices under section 131 at the instance of the assessee who did not pursue th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reat such a credit to be the income of the assessee." Coming to the facts of the present case, it is not denied that all the shareholders/share applicants are genuinely existing persons. It is also not denied that each of them is an income-tax assessee and the copies of the return of their income were also placed before the Assessing Officer by the assessee which fact is also not denied. In these circumstances, no material has been brought on record except inferring that the investors in the opinion of the Assessing Officer were not creditworthy to link the assessee with such investment of money made by those persons. The case squarely falls within the ratio laid down in the Steller Investment Ltd. [2001] 251 ITR 263 (SC) wherein it was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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