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TMI Blog2023 (11) TMI 927X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the amounts were received as share application money. 4. That the order ignoring the direction of the Hon'ble ITAT is illegal and wrong." 2. Heard the learned Representatives of both sides at length and case-records perused. 3. Briefly stated the facts are such that the assessee is a company. For the relevant AY 2003-04, the return filed by the assessee was selected for scrutiny and the original assessment-order was passed u/s 144 on 30.03.2006 after making certain additions against which the assessee filed first appeal to CIT(A). After decision of CIT(A), the assessee and Revenue both sides carried matters to ITAT, Indore Bench in I.T.A. No. 306/Ind/2011, I.T.A. No. 307/Ind/2011 and Cross Objection No. 3/Ind/2012 and those matters were decided by ITAT, Indore, through a consolidated order dated 23.03.2012. While deciding, the ITAT remanded a particular addition of Rs. 13,30,000/- u/s 68 to AO with a direction for fresh examination and re-adjudication after opportunity to assessee. Thereafter, in pursuance of such direction of ITAT, the AO passed a fresh assessment-order dated 31.03.2014 u/s 143(3) read with section 254 wherein the impugned addition of Rs. 13,30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deshmukh: (a) Referring to assessment-order, Ld. AR submitted that assessee submitted to AO that the shareholder was an advocate in high court and also having agricultural income from land over 60 bighas. The copy of khasra report of land was submitted to AO. Further, an affidavit of Shri Bhupendra Deshmukh, son of shareholder, was also submitted confirming that his father, Shri M.B. Deshmukh/ shareholder, had expired on 07.03.2002. However, the AO observed that if the shareholder expired on 07.03.2002, how could he deposit amount during the financial year 2002-03, AY 2003-04 under consideration? On this reasoning, the AO made addition. Ld. AR submitted that there occurred a typo mistake in mentioning the date of death in the affidavit submitted to AO, hence the assessee filed a revised-affidavit dated 26.02.2021 to CIT(A) during first-appeal mentioning correct date, copy of revised affidavit is filed at Page No. 7 of Paper-Book-I. The revised-affidavit contains a testimony of mistake having occurred in original affidavit as well as correct date of death. (b) Per contra, Ld. DR submitted that the assessee has shown a hefty receipt of Rs. 5 lakh in cash from shareholder but tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are application form. Therefore, the basic point still remains same i.e. how can the shareholder make sign on application-form and make investment on 05.03.2003 when he had already died on 07.02.2003. Furthermore, it is also noteworthy that the revised-affidavit, though notarized, is not signed by any deponent. The signature part is left blank. The signature at the right side of seal of notary, appearing in the scanned copy of revised-affidavit re-produced above, is a signature of assessee's counsel for certification of documents filed in Paper-Book and not of deponent of affidavit. Thus, without making any more comment from our side, we only suffice to conclude that the assessee has miserably failed to prove the identity of the shareholder much less the elements of creditworthiness and genuineness. In these circumstances, we are not inclined to accept the impugned receipt of Rs. 5,00,000/- as satisfying the requirements of section 68. Consequently, we uphold the addition of Rs. 5,00,000/-. (ii) Shri Vijay Singh Rajput: (a) Referring to assessment-order, Ld. AR submitted that assessee submitted to AO that the shareholder expired on 21.05.2012 (after 1st round of assessment but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - with assessee. Further, the AO also noted that the shareholder-society cannot make investment in assessee's shares since it would violate the provisions of section 10(23C) read with section 11(5). Ld. AR submitted that the AO has wrongly linked the investment of Rs. 3,00,000/- with gross-receipts of current year alone, the investment could very well be made out of accumulated funds. Ld. AR also contended that the observation by AO that the shareholder- society cannot make investment in shares of assessee as it would be a violation of section 10(23C) or 11(5), is something which is totally irrelevant to assessee. Ld. AR submitted that if it is a violation in the hands of shareholder-society, the department may very well proceed against the shareholder-society but how can the department draw any adverse inference against assessee? Therefore, the AO's order is very much wrong. (b) Ld. DR relied upon AO's order. (c) On a careful consideration, we find that the assessee has made following explanation before lower-authorities qua the identity, genuineness and creditworthiness of the impugned receipt: Identity: Society incorporated on 12.04.1996 Having Registered Office at Bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Mayank Club for the year ended on 31.03.2003 reflecting share application money of Rs. 3,00,000/- is enclosed. We find that the shareholder is a registered society from 18.05.1997, copy of registration-certificate issued by Registrar of Societies is placed in Paper-Book-II, Page No. 27. PAN card of shareholder is in Paper-Book-II, Page No. 28. Constitution-Deed is filed in Paper-Book- II, Page No. 29 to 40. It appears from order of CIT(A) that the assessee has also filed a copy of audited Receipt & Payment A/c reflecting the share-application money payment of Rs. 3,00,000/- to assessee, which is not controverted by Ld. DR. The observation made by Ld. AO that the shareholder is a low-profile club which cannot make investment of Rs. 3,00,000/- in assessee's share, is only a conjecture not based on any fact. Therefore, we do not find any justification in the basis adopted by lower-authorities for making addition in the hands of assessee. Consequently, we delete the addition of Rs. 3,00,000/-. (v) Shri Sanjay Gupta: (a) Referring to assessment-order, Ld. AR submitted that the assessee submitted copy of ITR of shareholder from which the AO observed that the shareholder was havi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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