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Gopal Iron And Steel Co. (Guj) Ltd. Versus Income Tax Officer

2017 (9) TMI 839 - GUJARAT HIGH COURT

Addition u/s 68 - unexplained cash credit - source of money received in share applications etc - Held that:- In some of the cases, signature of the applicants in the bank slip differ with the application in the share application form. Many of the bank slips were signed by one person. Apparently, cash for 32 applicants was handed over by one person of the entire amount. The demand drafts were issued by Wadhwan city branch of the bank whereas the applicants were living at different places such as .....

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rs were not genuine which finding the Tribunal has confirmed - Decided against the assessee. - TAX APPEAL NO. 650 of 2017 With TAX APPEAL NO. 651 of 2017 - Dated:- 12-9-2017 - MR. AKIL KURESHI AND MR. BIREN VAISHNAV, JJ. For The Appellant : MR VIJAY S RANJAN, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The original order of assessment passed by the Assessing Officer dated 23.3.1999 is taken on record. 2. These appeals involve similar questions in similar background involvin .....

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96-1997. The assessee company had filed return of income declaring a loss of ₹ 9,919/. The return was taken in scrutiny by the Assessing Officer who passed the order of assessment determining the total income of the assessee at ₹ 46.92 lakhs (rounded off) making addition of the same sum under section 68 of the Income Tax Act ( the Act fort short) on account of unexplained cash credit in the form of share application money. The assessee carried the matter in appeal. After one round of .....

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share applicant, their PAN, source of money received in share applications etc. The Assessing Officer noted that the assessee filed ITR acknowledgment of 18 parties which constituted share capital of ₹ 60,43,000/. For the remaining parties, confirmation of 26 parties involving share capital of ₹ 16,82,900/were filed without any details like identity, genuineness and credit worthiness of the share capital. The confirmation of such 26 parties were filed in common format. Regarding rem .....

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nd drafts are as under : i) Cheques drawn on the Gujarat State Co.op bank ltd., Ahmedabad Sr. No. Name Cheque No. Date Amount 01 Ganapatbhai A. Patel 689702 5.5.95 25000 At Kherva, Tal. Patadi, 02 Vinodchand V. Patel 689703 5.5.95 25000 At Kherva, Tal. Patadi, 03 Bhurabhai G. Patel 689704 5.5.95 25000 At Kherva, Tal. Patadi, 04 Jivanbhai L. Patel 689705 5.5.95 25000 At Kherva, Tal. Patadi, 05 Hargovindbhai C. Patel 689706 5.5.95 25000 At Kherva, Tal. Patadi 06 Baldevbhai P. Patel 689707 5.5.95 2 .....

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15 5.5.95 25000 At Dudapur Vaya Gala, SNR 15 Jerambhai R. Patel 689716 5.5.95 25000 At Dudapur Vaya Gala, SNR 16 Lavjibhai D. Patel 689717 5.5.95 25000 At Dudapur Vaya Gala, SNR 17 Virajibhai Patel 689718 5.5.95 25000 At Nana Ankevaliya, 18 Ramaji K. Patel 689719 5.5.95 25000 At Nana Ankevaliya, 19 Chhaganbhai M. Patel 689720 5.5.95 25000 At Dudheraj, Wadhwan, SNR 20 Tribhuvan Patel 689721 5.5.95 25000 At Dudheraj, Wadhwan, SNR 21 Hargovindbhai C. Patel 689748 6.6.95 25000 At Kherva, Tal. Patadi .....

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774 28.6.95 25000 At Nana Ankevaliya,SNR 30 Prahladbhai M. Patel 689775 28.6.95 25000 At Nana Ankevaliya,SNR 31 Baldevbhai G. Patel 689776 28.6.95 25000 At Nana Ankevaliya,SNR 32 Hargovindbhai C. Patel 689777 28.6.95 25000 At Nana Ankevaliya,SNR Total 800000 State Bank of India Sr. No. Name Cheque No. Date Amount Address 01 Khumansingh Jumbhai Solanki 271459 19.1.96 49000 PO Hadala T.A. Limbdi Surendranagar 02 Hemubha Jembhai Solanki 271460 19.1.96 49000 PO Hadala Dist. A'bad Dhanduka 03 Bal .....

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na 242754 12.12.95 15000 At Talodgam TA Pratij Dist. Himmatnagar 02 Chhaganbhai K Patel 242755 12.12.95 40000 At Talodgam TA Pratij Dist. Himmatnagar 03 Gangarambhai K Patel 242756 12.12.95 40000 At Talodgam TA Pratij Dist.SK 04 Ravjibhai N Patel 242757 12.12.95 45000 At. Vakrapur TA Pratij Dist SK 05 Dashrath N Raval 452984 20.10.95 17000 rf. Sr. 11 06 Ramasingh Magansingh Rathod 452985 20.10.95 15000 rf. Sr. 11 07 Dashrath N Raval 452986 20.10.95 8000 rf. Sr. 11 08 Dilipsingh J Makwana 452987 .....

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ai Patel 958842 16.05.95 18000 refer Sr. 4 5 Bhagwatiben Patel 958844 16.05.95 10000 refer Sr. 4 6 Madhuben Patle 958845 16.05.95 10000 62, Poonamnagar Bhalan Rd. Surat 7 Manoharbhai Jada 958846 16.05.95 10000 AT & PO Amrali TA. 8 Manoharbhai M Patel 958847 16.05.95 15000 64, Rangnagar Soc. Dist Surat 9 Naranbhai Patel 958848 16.05.95 10000 123000 Enquiries were conducted with the Surendra Nagar Dist Coop Bank Ltd Wadhwan City Branch regarding 32 applicants photocopies of slips of demand dra .....

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s are signed by one person named Rameshbhai. Photocopies of these 12 share application forms and bank slipls for DD are enclosed annexed to the order. iv) In all the 32 applications, break up of cash is not given which indicates that one person has handed over total amount to the banker for taking drafts in different names. v) All the demand drafts are issued by Wadhwan city Bracnh of SNR Dist Co. Op Bank Ltd whereas the applicants are living in different places like Kherwa, Patdi, Nana Ankleshw .....

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sactions or not. a) 18 applicants applied for share capital of ₹ 6043000 for which confirmations and PA Nos are filed along with ITR acknowledgment are considered as genuine and correct. b) Confirmations of 26 parties of share capital of ₹ 1682900 are filed in common format without any corroborative evidences to prove genuineness and credit worthiness from which source applicant has made application. c) 145 applicants for share capital of ₹ 3010000 no confirmation and source of .....

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icer has jurisdiction to make enquiries with regard to the nature and source of a sum credited in the books of account of the assessee and it is immaterial as to whether the amount so credited is given the colour of a loan or a sum representing sale proceeds or even receipt of share application money. The use of words any sum found credited in the books in section 68 indicates that the section is very widely worded and the Income Tax officer is not precluded from making any enquiry as to the tru .....

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nt of the company. Further assessee has not proved ingredients as decided by Calcutta High Court in the case of CIT vs. Precision Finance Pvt. Ltd (1994) 208 ITR 465. Therefore, it is clear that assessee has not discharged its onus to prove that share capital is genuine and correct. Subject to the above discussion, the unexplained credit in the form of share capital of ₹ 4692900 (1682900 + 3010000) are held as income chargeable to tax in the hands of the assessee company u/s. 68 of the IT .....

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