TMI Blog2016 (3) TMI 1373X X X X Extracts X X X X X X X X Extracts X X X X ..... ute, hence, we uphold the same and dismiss the ground no. 1 raised by the Revenue in its Appeal. - ITA No. 5153/Del/2011 - - - Dated:- 4-3-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Department : Sh. V.R. Sonbhadra, Sr. DR For The Assessee : Sh. R.C. Roy, Advocate ORDER PER H.S. SIDHU, J.M. The Department has filed this Appeal against the impugned Order dated 28.09.2011 of Ld. CIT(A)-XIX, New Delhi pertaining to assessment year 2003-04 on the following grounds:- 1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition of ₹ 40,00,000/- made by the AO u/s. 68 of the I.T. Act and ₹ 1,00,000/- on account of commission thereon, where the assessee failed to discharge its onus to prove the genuineness of the transactions. 2. The appellant craves for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of appeal. 2. The brief facts of the case are that the Assessee filed return of income on 1.3.2004 declaring a total of ₹ 24,68,110/-. The assessee is a company and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference and the same may be upheld. 6. We have heard both the parties and perused the records, especially the Orders of the revenue authorities and precedents relied upon by the Ld. CIT(A) in his impugned Order. We find that Ld. CIT(A) has elaborately adjudicated the issues in dispute in his impugned order vide para nos. 7 to 19 from pages 4 to 9. For the sake of convenience, we are reproducing the para nos. 7 to 19 from pages 4 to 9 as under:- 7. I have gone through the assessment order and the written missions filed by the AR. 8. Share application money/Share capital : The assessee company received share application money/share capital from the following persons/companies and the details furnished are as under: 9. The assessee has filed the following documents in the course of assessment proceedings to prove the transactions. a) Share Application Form received from sharps. b) Board resolution of share holders. I c) Memorandum article of associates of share holders. d) Share allotment letters e) Copy of Form no.2 i.e. return of al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be harassed by the Revenue's insistence that it should prove the negative. In the case of public issue, the company concerned cannot be expected to know every details pertaining to the identity as well as financial worth of each of its subscribers. The company must, however, maintain and make available to the Assessing Officer for his perusal, all the information contained in the statutory share application documents. In the case of private placement the legal regime would not be the same. A delicate balance must be maintained while walking the tightrope of section 68 and 69 of the Income Tax Act. The burden of proof can seldom be discharged to the hilt by the assessee; if the Assessing Officer harbors doubts of the legitimacy of any subscription he is empowered, nay duty-bound, to carry out thorough investigations. But if the Assessing Officer fails to unearth any wrong or illegal dealings, he cannot obdurately adhere to his suspicions and treat the subscribed capital as the undisclosed income of the company. 'Further, a distillation of the precedents yields the following proposition of law in the context of section 68 of the Income Tax Act. The Assessee has to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are not in dispute, The Hon'ble Supreme Court in case of Divine Leasing Finance Ltd. (supra) has held that if the share application money is received by the assessee company even from the bogus shareholders whose names are given to the AO then the Department is free to proceed to reopen their individual assessments in accordance with law. Accordingly, addition made under s. 68 which was deleted by the Hon'ble High Court was upheld by Hon'ble Supreme Court. A perusal of the orders of the Hon'ble Supreme Court in the case of Divine Leasing Finance Ltd. referred to supra is in regard to SLP filed by the Revenue against the order of the Hon'ble Jurisdictional High Court. The Hon'ble Supreme Court has specifically with a speaking order dismissed the SLP. The Hon'ble Supreme Court in the various decisions referred to by the learned Authorized Representative has categorically held that the addition in regard to the share capital cannot be treated as the undisclosed income of the assessee if the share application money is received by the assessee company from alleged bogus shareholders whose names are given to the AO. Further the Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the principles of natural justice. 14. If there is any discrepancy in the books of accounts maintained by the investing companies, there is a case for reopening of the assessment of the respective shareholders/investing companies. 15. The assessee cannot be penalized for the mistakes/faults committed by the share holders. The AO has not found any discrepancy in the books of account and bank accounts maintained by the assessee. 16. It is settled principle of law that no addition / disallowance can be made on suspicion, surmises and conjectures as held by the Hon'ble Supreme Court in the following cases. a) Dhirajlal Girdharilal v CIT 26 ITR 775 b) Omar Salay Mohammed Sait v CIT 37 ITR 151 c) Dhakeshwari Cotton Mills Ltd. v CIT 26 ITR 775 d) Lalchand Bhagat Ambica Ram v CIT 37 ITR 288 17. In the case of Acchyalal Shaw v. ITO (2009) 30 SOT 44 (Kol.) (URO), the Hon'ble ITAT observed as under: Suspicion cannot replace evidential document. Simple argument or allegation of manipulation is not sufficient without proper evidence. 18. In view of the above facts and circumstances and available legal position, the share ..... X X X X Extracts X X X X X X X X Extracts X X X X
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