2016 (3) TMI 1348
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....the case the CIT (A) erred in deleting the addition of Rs. 49,00,000/-- made by the AO under section 68 of IT Act, 1961, ignoring the fact that credit worthiness of the share applicant was not proved. 2. Whether on the facts and the circumstance of the case the CIT (A) erred in holding the receipt of Rs. 49,00,000/- as genuine transaction which were established to be doubtful in view of the fact that the entire transaction was made in cash and the share applicant company did not have sufficient capacity to make such payment. 3. since entire amount of share application was received in cash and remained as such, whether the CIT (A) erred in holding transaction as genuine ignoring the fact that this cash was not appearing in the books of....
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....of the cash credit. 6. The assessee carried the matter before the learned Commissioner of Income-tax (Appeals), who deleted the addition u/s 68 because of the reason that the assessee has shown complete details of the transaction in cash producing cash book of M/s. Anshu Tradex Pvt. Ltd. and also cash book of Godavari Build well Pvt. Ltd. where from M/s. Anshu Tradex Pvt. Ltd received the above sum. The learned Commissioner of Income-tax (Appeals) was of the view that complete trail of the money which is credited in the books of assessee company as share capital is explained. Therefore there is no doubt about the identity, creditworthiness and genuineness of the transaction entered into by the assessee company. 7. Aggrieved by the order o....
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....011 and also of Hon'ble Supreme Court in the case of M/s. Deepak Agro Foods Vs. State of Rajasthan in Civil Appeal No.4327-28/2008. He further relied on the decision of Hon'ble Delhi High Court in the case of CIT Vs. M/s. Jan Samparak Advertising and Marketing Pvt. Ltd. ITA 525/2014 dated 11.03.2015. 9. The ld AR of the assessee explained that the complete money trail is available which is given at Page 5 of order of learned Commissioner of Income-tax (Appeals) and therefore addition cannot be made in the hands of the assessee u/s 68 of the Act. He further submitted that the money in cash is received by the assessee from M/s. Anshu Tradex Pvt. Ltd who in turn received cash from M/s. Godavari Build well Pvt Ltd and Godavari build well Pvt l....
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....t pages of the Paper Book to which our attention was drawn. The amount of Rs. 48,51,000/- was received in cash by the assessee during the year for share allotment by the company in favour of M/s. Anshu Tradex Pvt. Ltd. The cash book of M/s. Anshu Pvt. Ltd shows that on 10.12.2007 an amount of Rs. 4851000/- was deposited being share application for 485100 shares @ Rs. 10/- each of the assessee company. The source of these funds is that on 09.12.2007 an amount of Rs. 50 lacs was received as share application money in the books of M/s. Anshu Tradex Pvt Ltd. from M/s. Godavari Build well Pvt. Ltd. Regarding the source of money in the books of Godavari Build well Pvt. Ltd an amount on 09.12.2007 of Rs. 50 lacs was deposited in cash book showing ....
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....ot genuine. We do not find any distinction between the transactions entered into by the assessee through banking channel or in cash unless prohibited by the law. Therefore for the purposes of applicability of section 68 of the Act both are looked at in similar manner. It may be possible that in transaction in cash further enquiries may be made in absence of trail which is generally available in transactions through banking channel. In view of this we are of the opinion that the assessee has adequately explained the identity, creditworthiness and genuineness of the transaction of share application money of Rs. 4851000/- deposit in cash in name of M/s. Anshu Tradex Pvt. Ltd with the assessee. Hence we confirm the order of learned Commissioner....