2011 (2) TMI 1555 - HC - Income Tax

Summary

Issues Involved:
The judgment involves an appeal u/s 260A of the Income-Tax Act by the Revenue against an order passed by the Income-Tax Appellate Tribunal regarding the addition of share application money in the assessment year 1986-87.

Issue I:
The first substantial question of law was whether the ITAT was justified in upholding the deletion of Rs. 9,15,000 in respect of share application money received by the assessee. The Assessing Officer added this amount as undisclosed income, but the CIT (Appeals) set aside the order after considering the documentary evidence provided by the assessee, including details of shareholders and transactions. The High Court agreed with the lower authorities that the Assessing Officer's approach was unjustified as the documentary evidence was sufficient to prove the genuineness of the share application money.

Issue II:
The second question was whether documentary evidence alone was enough for the assessee to discharge the onus to prove the genuineness of share application and allotment. The High Court found that the details of Permanent Account Numbers, payment details, shareholding numbers, and bank transactions provided by the assessee were indeed sufficient to support the genuineness of the share application money.

Issue III:
The third question was whether the Tribunal was justified in not upholding the addition of Rs. 9,15,000 claimed to be share application money by the assessee since the share applicants were not produced before the Assessing Officer. The High Court held that the failure to produce the applicants before the Assessing Officer did not justify disbelieving the explanation offered by the assessee, especially when detailed documentary evidence was presented. The Court dismissed the Revenue's appeal, affirming the decisions of the lower authorities.

In conclusion, the High Court dismissed the Revenue's appeal, finding no reason to interfere with the decisions of the Commissioner of Income-tax (Appeals) and the Tribunal below. The Court held that the Assessing Officer's approach was not supported, as the documentary evidence provided by the assessee was sufficient to prove the genuineness of the share application money.