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2018 (1) TMI 607

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..... ct his task diligently, he ought to have at least sought the material by way of bank statements etc. to discern whether in fact the amounts were infused into the share holder’s account in cash at any point of time or that the amount of ₹ 1.3 crores – in the case of M/s. Creative Financial Services Pvt. Ltd and ₹ 3.7 crores in the case of other share applicants were such as to be beyond their means. In the absence of any such enquiry, the Court is of the opinion that the findings holding that the assessee had not discharged the onus placed upon it by law cannot be considered unreasonable. No question of law arises. - ITA 9/2018 - - - Dated:- 8-1-2018 - MR. S. RAVINDRA BHAT MR. A.K. CHALWA JJ. Appellant Through: Sh. Sanj .....

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..... s/burden of proving the genuineness of the identity of the applicants, the genuineness of the transactions or the creditworthiness of the investors as required by the decision in CIT v. Lovely Exports P. Ltd. 216 ITR 195 (SC). 6. Aggrieved, the assessee appealed to the CIT(A). By an order dated 02.08.2010, the CIT(A) examined all the materials afresh and held that further material in the form of documents pertaining to the share applicant companies had been provided, which however, were not examined by the AO while confirming the assessment. The CIT(A) was of the opinion that the AO gave undue importance to the statements given by Mr. Mahesh Garg, Ms. Rekha Garg and Mr. Vinod Garg and one Mr. Suresh Kumar Jain, Director of M/s. .....

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..... TR 151 (Parna) it was held that assessee having furnished the correct name and address of the creditor, having confirmatory letter from the creditor and all materials show prima facie not only identify of the creditor but also the genuineness of the transaction, no adverse inference can be drawn. Reference can also be made to the judgement of Hon'ble Apex Court in the case of Steller Investment Ltd. (2001) 251 ITR 263 (SC) wherein it was held that even if the subscribers to the increased share capital of assessee company were not genuine, the amount could not be regarded as undisclosed income of the assessee company. The above view point of the Hon'ble Apex Court has also been expressed by Jurisdictional Delhi High Court in the c .....

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..... Creative Financial Services Pvt. Ltd that the AO did not complete the task assigned diligently in that the master details furnished to him were neither examined nor controverted. The CIT(A) was of the opinion that the assessee had discharged the onus to prove the identity of the concerned share applicants, i.e. M/s. Creative Financial Services Pvt. Ltd. as in the other cases. The ITAT, by the impugned order, re-examined the materials afresh and affirmed the findings of the CIT(A). It was held inter alia as follows: 10. We have heard the rival submissions and perused the judgments relied upon by the both the parties. In the case of M/s Creative Financial Services Pvt. Ltd., the assessee has submitted before the AO that Sh. Suresh Chand .....

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..... editworthiness and identity of the share subscriber. The AD has not produced anything on record to show how the share application money was tainted money of the assessee company which was routed through the share subscriber company. The Hon'ble Delhi High Court in the case of CIT Vs. Divine Leasing And finance Ltd., 299 ITR 268 , observed that if the AO fails to unearth any wrong or illegal dealings, he cannot adhere to his suspicion and treat the subscribed capital as undisclosed income of the company. It is to be further noted that mere denial by Sh. Suresh Chand Garg would not ipso facto lead to the conclusion that the transaction was hit by Section 68 of the Act. We therefore uphold the deletion of addition with respect to the shar .....

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