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TMI Blog2012 (10) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... /2009 - - - Dated:- 13-7-2012 - Shri D.K. Tyagi and Shri T.R. Meena, JJ. Department by : Shri S.K. Gupta, CIT D.R. Shri J.P. Dangi, Sr. D.R. Assessee by : Shri S.N. Saporkar, A.R. ORDER PER : D.K. TYAGI, JUDICIAL MEMBER ITA No.1542 of 2005 and ITA No.1444 of 2005 are cross appeal against the order of ld. CIT(A)-II, Baroda dated 24th March, 2005. ITA No.1658 of 2009 is assessee s appeal against the order of ld. CIT(A)-III, Baroda dated 20.02.2009 in respect of penalty proceedings u/s 271(1)(c ) of the Act. Since all these appeals belong to the same assessee and heard together, for the sake of convenience the same are being disposed of by passing a consolidated order. 2. First we will take up ITA No.1542 of 2005 and ITA No.1444 of 2005. Grounds in ITA No.1542 of 2005 are as under:- On the facts and the circumstances of the case and in law, the ld. CIT(A) erred: 1) In deleting addition of Rs.41,99,900/- made by the A.O., u/s 68 of the Act. The decision given by him is arbitrary and without appreciating the facts of the case as will be evident from the undermentioned facts gathered from enquiry at the assessment stage: (a) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir occupations were prepared by the A.O. and were grouped in the following categories based upon the response to the letters on enquiry sent by the A.O. to these share holders. Category A - Those who have denied investment Rs.9,00,000/-:- Sr.No Name of Applicants Paid by Cash Paid by D.D. Total Rs. 1. Shri Dalsukhlal K Madhvani 100000 100000 2. Shri Hitesh J Madhvani 100000 100000 3. Smt. Madhuben J. Madhvani 20000 80000 100000 4. Shri Manhar A Lakhani 20000 80000 100000 5. Shri Narendra A Lakhani 100000 100000 6. Shri Sunil A Lakhani 20000 80000 100000 7. Shri Ishwar P Raja 70000 30000 100000 8. Shri Jamnadas P Raja 100000 100000 9. Sliri Chandu P Raja 70000 30000 100000 Total 200000 700000 900000 Category 'B : The subscribers who did not comply, but submitted affidavits. Rs. 11,99,900/-:- Sr. No Name of Applicants Paid by Cash Paid by D.D. Total Rs. 1. Shri Rajendra Thakore 1116400 83500 1199900 Total 1116400 83500 1199900 Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Total Rs. 200000 100000 300000 Category 'F : Cases where no confirmation were submitted Rs.1,00,100/-:- Sr. No Name of Applicants Paid by Cash Paid by D.D. Total Rs. 1. Shri Arvind D Amipura 100000 100000 2. Shri Devesh K Shah 100 100 Total Rs. 100100 100100 For the reasons given by the A.O. from para 2.2 to 2.13 of his order he concluded his finding as under:- In view of the above discussions, it is clear that genuineness and creditworthiness of share application money claimed in the names of above 45 persons have not been proved. Hence, an amount of Rs.55,00,000/- is held as unexplained share application money and the same is treated as income from undisclosed sources in the hands of assessee company. Accordingly, an addition of Rs.55,00,000/- is made u/s 68 of the Act to the income returned by the assessee company. Penalty proceedings u/s 271(1)(c) is also initiated on the issue. Aggrieved by this order of the A.O., the assessee went in appeal before ld. CIT(A) who after taking into consideration the submissions of the assessee, confirmed the action of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT Vs. Lovely Export Pvt. Ltd. is squarely applicable to the facts of this case except in the case of category-A of the share holders who have denied to have subscribed to the shares of the company, respectfully following the same, we are of the considered opinion that the addition is to be restricted to the extent of Rs.9,00,000/- in respect of only those applicants of shares who have denied to have made any investment in the share of the company. We hold accordingly. 7. In the result, the appeal of the Revenue and assessee are partly allowed. ITA No.1658 of 2009 8. Grounds of appeal are as under:- 1. The ld. CIT(A) has grossly erred in law and on facts by not applying his mind to the basis for framing of charge for levying the penalty i.e. whether your appellant company has filed inaccurate particulars of its income or has concealed the income so as to evade the payment of tax thereon and has accordingly, failed to frame the specific charge of default and consequently the penalty order passed by the ld. ACIT has to be cancelled in toto and accordingly, it is prayed to your honour to cancel the penalty order in toto. 2. The ld. CIT(A) has grossly erred in la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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