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TMI Blog1997 (3) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... areholders and the investment in the shape of shares with the assessee-company. (d) Investment made by Smt. Meera Devi, Managing Director in the form of credit balance appearing in the balance sheet. (e) Unpaid liability of luxury tax. (f) Rickshaw commission. (g) Donations (h) Miscellaneous expenses. 2.1 After completion of enquiries, the AO added the following as additions to the net loss returned by the assessee: (i) Addition of Rs. 8,49,000 on account of unproved share application money received from 48 shareholders during the year for allotment of share. (ii) Addition of Rs. 18,575 on account of unexplained cash credit in current account of Smt. Meera Devi Lokera of the assessee. (iii) Disallowance of Auto Rickshaw commission by adding back Rs. 2,000. (iv) Donation of Rs. 139. (v) Miscellaneous expenses of Rs. 200. (vi) Disallowance of unpaid luxury tax Rs. 11,622. (a) As far as the first addition is concerned the AO made such addition because name of the shareholders, except Smt. Ketki Devi is income-tax assessee. (b) They are all engaged in small business like stitching, contract business, agriculture, service, etc. (c) All of them have deposite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee, it is found that the details of the shareholders such as names of the shareholders, details of the documents already produced before the AO. On a careful reading of all these particulars we find that the assessee had brought before the AO almost every details which are necessary to establish the case of the assessee. The list also contains the investment made by such persons during 1990-91. Apart from that on a perusal of this list it shows that all the 51 shareholders had filed their affidavit and confirmatory letters and 24 of them filed their replies also to the notice under s. 133(6) of the IT Act. These particulars also reveal the financial status of the shareholders. It is seen from the paper-book that affidavits, confirmation letters and replies which were placed before the authorities below, especially before the AO during the assessment proceedings. Therefore, there is no substance in contending that the source of credit amounting to Rs. 8,24,000 remains unexplained. The fact that the assessee is incorporated under the Companies Act is not disputed. The shares of the company were fully subscribed. The names of the parties purchasing the shares wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation letters and affidavits from the shareholders to explain the credits appearing in the books of assessee-company as share capital. From the above decision it is evident that in respect of share capital, main thing is to be examined is whether shareholders existed ? If assessee is able to establish that shareholders existed and they have invested money for purchase of shares, burden of assessee to prove the credit is discharged. In this case identity of shareholders was not in dispute. All the shareholders have affirmed on oath that they have invested money. The only dispute by the Revenue was that creditworthiness of shareholders was not established. As is clear from the decision of Hon'ble Delhi High Court, unlike cash credit, for investment in share capital, assessee is not required to prove creditworthiness of shareholders. The assessee is required to prove only existence of shareholders and money, having been received from them. Both these points, i.e., existence of shareholders and receipt of money from them are established by the assessee. 9. The aforesaid decision of the Delhi High Court was followed by the Delhi Bench of Tribunal in the case of Rishi Electronics Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Departmental Representative and the learned Departmental Representative objected any such additional ground being taken at this stage. The learned Departmental Representative submitted that this ground was neither taken before the AO nor before the learned CIT(A) nor even at the time of filing this appeal before the Tribunal. Hence, according to him, such additional ground cannot be entertained at this stage. On the other hand, the learned counsel for the assessee submitted that there is no investigation of any kind or to find out any new fact is not at all required as the entire facts relating to this ground is already present as the same is evident from the records of this case. There is no new fact required to decide the issue raised in the additional ground. It was also further contended by the learned counsel for the assessee that apex Court in the case of East India Hotels vs. CIT (1996) 136 CTR (SC) 246 : (1997) 223 ITR 1 (SC) held that: "The hotel building is a tool of the assessee's trading activity and is to be treated as plant for the purpose of depreciation under s. 32 of the IT Act". 15. We have considered the submissions made before us by both the sides. The fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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