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TMI Blog2012 (11) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... has been decided in favour of the assessee and the addition made u/s 68 of the Act has been deleted, therefore, charging of interest is consequential in nature, meaning thereby that it is not leviable/chargeable - if the Assessing Officer was apprehensive of any mala fide on the part of share applicant, he was at liberty to reopen their individual assessments, therefore, there is no justification to make the addition in the hands of the assessee – In favor of assessee Disallowance of Rs. 6,000/- out of telephone and communication expenses, Rs. 5,000/- out of vehicle repair and maintenance expenses, Rs. 3,000/- out of vehicle running expenses and Rs. 6,000/- out of travelling expenses – Held that:- Disallowances were made by the Assessing Officer as necessary bills and vouchers were not filed by the assessee, therefore, expenses were not fully verifiable - no evidence was filed in support of its claim – disallowance deleted X X X X Extracts X X X X X X X X Extracts X X X X ..... rification of the books of account of the assessee, he further found that the dates of receipt of payments are also not mentioned. He further noted that at the same time the amounts are also not appearing in their personal account, consequently, the Assessing Officer made addition of Rs.12,34,489/-. On appeal before the learned Commissioner of Income Tax (Appeals), it was found that out of 64 entries, 34 entries belong to one person namely, Shri Mohanlal Jat, the details of which have been reproduced at page 8 onwards (para 4.3) of the impugned order. So far as another 15 entries with reference to Shri Naresh Dhingra are concerned, it was found that on most of the dates, there were more than one entry of receipt of amounts and the advances were received against supply of PVC pipes. There is uncontroverted finding in the impugned order that no efforts were made by the Assessing Officer either to verify or to rebut the facts submitted by the assessee, therefore, he deleted the addition. We further find that the submissions of the assessee have been reproduced in para 4.2 (page 7) of the impugned order. If the totality of facts is analysed, the factum of receipt of details of payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel for the assessee defended the impugned order. 6. We have considered the rival submissions and perused the material available on file. We find that the revenue is aggrieved by the deletion of the addition of Rs. 5,28,035/- (assessment year 2002-03), Rs. 13,59,864/- (A.Y. 2003-04) and Rs. 7,38,896/- (A.Y. 2004-05) on the plea that the books of account were rightly rejected by the Assessing Officer and the estimation of sales by applying the gross profit was also defended whereas the assessee has challenged the rejection of books and estimation of sales along with application of gross profit. We find that for the assessment year 2002-03 the assessee showed the sales at Rs.3,00,81,719/- against which the Assessing Officer estimated such sales at Rs.3,16,00,000/- resulting into addition of Rs.5,28,035/-. For the assessment year 2003-04 the total sales were shown at Rs.3,72,34,558/- which were estimated at Rs.3,75,00,000/- by the Assessing Officer by applying gross profit at the rate of 16.5%, as against 15.5% shown by the assessee, resulted into addition of Rs.13,59,864/-. Likewise, for the assessment year 2004-05 the assessee showed the gross sales at Rs.3,26,04,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tead of deletion. However, the learned counsel for the assessee defended the impugned order. 9. On perusal of record and after hearing the rival submissions, we are of the view that rather this is the baby of the aforesaid grounds and since the stand of the learned Commissioner of Income Tax (Appeals) has been affirmed, it has remained for academic interest only, consequently, we find no infirmity in the stand of the learned Commissioner of Income Tax (Appeals) especially when the application of G.P. and estimation of sales was found to be based on surmises only. Our stand will also cover the identical ground raised for the assessment year 2003-04 and 2004-05. In the result, appeals of the revenue are having no merit. 10. Now we shall take up the appeal of the assessee in which the assessee is aggrieved by the sustenance of addition of Rs.8,48,400/- in respect of share capital received from subscribers, denying deduction u/s 80IA and disallowance of ad hoc additions on account of telephone and communication expenses, vehicle repair and maintenance expenses, vehicle running expenses and travelling expenses. The crux of arguments on behalf of the assessee is that so far as share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer along with confirmation letters of concerned subscribers to the share application money in the form of affidavit containing the particulars like name, age and address of the applicant. The number of shares for which application was made along with the amount and source of income were also furnished. It was further claimed that the assessee proved the identity and source of the subscribers. It was pointed out that the subscribers even while affirming the contents of the affidavits, duly appeared before the notary public and entered their signatures in the register maintained by the said notary. The Assessing Officer never cross examined the subscribers, therefore, the facts maintained in the affidavit are unchallengeable for which reliance was placed upon the decision from the Hon'ble Apex Court in Mehta Parikh & Company v. CIT; 30 ITR 181 (SC). Another argument preferred by the assessee is that the amount of share application cannot be regarded as undisclosed income u/s 68 for which reliance was placed on the decision in CIT v. Lovely Exports; 216 CTR 195 (SC); CIT v. Divine Leasing & Finance Limited; 299 ITR 268 (Del); CIT v. GP International Limited; 229 CTR (P&H) 86; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dumy persons and hence the entire amount of the share application money is considered as Bogus share application money. The assessee company has not proved the genuineness of such persona dna slo not proved their capacity to apply for such huge amount. These are dumy and the assessee company has introduced its own money as share application money." 4. On appeal, the ld. first appellate authority by following the decision of the Hon'ble jurisdictional High Court in the case of CIT v. Rathi Finlease Limited; 215 CTR (MP) 429 to the effect that onus is on the assessee to establish the genuineness of the credits, affirmed the stand of the Assessing Officer which is under challenge before the Tribunal. We have found that the impugned addition u/s 68 of the Act has been made by the learned Assessing Officer by suspecting that the share application money is bogus without appreciating the fact and even the contents of the affidavit have not been disapproved. The undisputed fact is that the assessee has proved the identity of the subscribers with the help of affidavits which were not found to be bogus or false. An affidavit is not a mere piece of paper rather it carries its authenticity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present appeal, since the assessee has discharged its onus by proving the identity of subscribers and even otherwise had any suspicion still remained in his mind, nothing prevented him to initiate action as per the provisions of the Act. The existence of subscribers to share application is not in doubt as the assessee duly furnished their names. Age, address, date of filing the application, number of shares for which respective applications were made, amount given and the source of income of the applicant. In view of these facts, we are of the considered opinion that that there is no justification for making the impugned addition because once the existence of the investor/share subscribers is proved, onus shifts on the revenue to establish that either the share applicants are bogus or the impugned money belongs to the assessee company itself. Once the confirmation letters are filed, no addition can be made on account of share application money in the hands of the company. Our view finds support from the decision in Shri Barkha Synthetics Limited v. ACIT. The case like CIT v. GP International Limited; 229 CTR (P&H) 86, CIT v. Steller Investment Limited; 192 ITR 287 and Sophia Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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