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TMI Blog2022 (6) TMI 1159X X X X Extracts X X X X X X X X Extracts X X X X ..... .AO should be directed to delete the said addition, while computing total income. Rs. 52,99,188/- 4 That the learned CIT(A) has erred in law and facts by confirming the disallowance of Rs. 25,184/- under section 14A of the I.T Act and therefore the ld. Assessing Officer is to be to delete the said disallowance, while computing the total income. Rs. 7,782/- 3. That correct total income and income tax there on is to be computed and interest 234B and 234C of the Act to be recomputed as per Law. That proper credit of the prepaid taxes is to be given. No effect 4. That your appellant craves a leave to add, alter or amend any grounds at the time of hearing. No effect Total tax effect (see note below) Rs.53,06,970/- 3. At the outset, the counsel for the assessee submitted that he would not be pressing ground number 3 in relation to disallowance u/s 14A of the Act. Accordingly ground number 3 of the assessee's appeal is being dismissed as not pressed. Ground number 2: addition of share application money of Rs. 1,59,53,000/- 4. The brief facts of the case are that the assessee filed return of income for 22-09-2011 declaring total loss of Rs. 6,64,347/- for assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me without having any financial worthiness in its books has in connivance with the so-called share applicants have arranged accommodation entries by paying commission to convert the assessee's unexplained money in the form of share application money, by simply filling up the share application form and transferring money from the applicants' account and once the money is got through the banking channel, the assessee show it as share application money in the balance sheet and capitalize it and forget everything. The share applicants on the other hand operate a number of fictitious companies/ firms and channelize the cash received from the companies where share application is applied for. Such is the modus operandi adopted by majority of the parties having unaccounted money, to make it "white". Otherwise, no prudent businessman will take such a risk for making huge investment that too in a company where business and financial worth is dwindling due to constant losses and also has no authorized capital as per the balance sheet as on 31.03.2011. It is therefore, astonished to note that how a limited company without authorized capital can issue shares worth crores of rupees. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Maars Software International Ltd. which, was not complied with. The appellant has not made any submission during the appellant proceeding despite being provided as many as four opportunities. The CIT(A) in the A. Y. 2012-13 has also upheld the share application money received from above two persons. I agree with the finding of the AO and accordingly the addition made by AO u/s. 68 of the act is confirmed. The ground of appeal is dismissed." 6. The assessee is in appeal before us against the aforesaid additions on account of bogus share application money. At the outset, the counsel for the assessee submitted that the issue has now been decided in favour of the assessee by the Ahmedabad ITAT in the assessee's own case for assessment year 2012-13, which was the basis for the re-opening the assessment for assessment year 2011-12 under section 147 of the Act. The counsel for the assessee submitted that since the Ahmedabad ITAT for assessment year 2012-13 and in which year the same parties from whom share application money was received in the impugned assessment year 2011-12, has decided in favour of the assessee, the matter is now covered in favour of the assessee. The assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not unearthed by the AO in his remand report. The AO nowhere discussed about the genuineness of the balance payment of Maars software i.e. Rs.2,05,70,000/- minus Rs.70,00,000/-. It might have been received in earlier years, and could be part of the total payment considered by the AO. It suggests that he has not conducted any inquiry about both these concerns. When the assessee has been alleging that Rs.70.00 lakhs received during this period from Maars Software has been returned to the contributor i.e. Anil Enterprises, who had paid it on behalf of the Maars Software, he simply doubted it, the AO should have conducted more inquiries. 19. As far as payment received from Ski High Financial Services is concerned, though according to the AO, the assessee did not file copy of return, and complete bank statement, but assessee has disclosed PAN of this concern. In the paper book, the assessee has filed copy of the return also, under a certificate that it is not sure, whether this copy was filed before the AO or not, but it has been alleged that this document has been obtained from the Income Tax Department. Grievance of the AO is that this concern has shown a meager income, and did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis that during the course of assessment proceedings for assessment in 2012-13, it was found that the assessee company received share application money from M/s Mars Software International Ltd. and Mr. Anil Jain to the tune of Rs. 3,87,72,000/-. The "reasons to believe" for assessment year 2011-12 specifically mentioned that the basis for the opening the case under section 147 of the Act is that during the course of assessment proceedings for assessment year 2012-13, it was found that the assessee accepted the share application money to the tune of Rs. 3,87,72,000/- in respect of which additions under section 68 of the Act were made. The first appellate authority in the appeal for assessment year 2012-13 deleted the addition to the tune of Rs. 1,59,53,000/-for the reason that the said share application money pertained to the earlier year and hence could not be added in assessment year 2012-13. It was for this reason, reassessment proceedings were initiated for the impugned assessment year 2011-12 to tax the aforesaid share application money in the hands of the assessee, which could not be taxed in assessment year 2012-13 since it did not pertain to that year. However, since ..... 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