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TMI Blog2012 (12) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... This appeal by Revenue against the order dated 26/07/2010 of learned CIT(A)-I, Kanpur raises the following grounds: 1. Ld. CIT(A) erred in deleting the addition of Rs. 10 lacs being the unexplained share application money without appreciating the fact that the identity of some of the share holders could not be established. 2. In doing so the CIT (A) has erred in applying the ratio of the decision of the Lovely Exports (P) Ltd. 216 CTR 195 (SC) as in this case the identity of some share applicants could not be established. The ratio of Lovely Exports applied only in case where share holder exists and he accepts having invested in the shares of the specific company. The ratio of this case does not apply in a case where the existence of share holders is not known. 3. CIT(A) has erred in applying the ratio as in this case the share applicants did not have any source of income. The ratio of Lovely Exports mentions that in case of genuine transaction by a share-applicant the amount of share money can be assessed in the hands of the applicants. It does not cover a case where the share holders does not have source of income as in the present case. 4. CIT(A) has erred in deleting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the notice served upon him. Smt. Indu Agarwal filed confirmation along with the copy of her bank account No. 007082 with Bank of Baroda, Kabari Market, Kanpur. Thereafter, the Assessing Officer, vide letter dated 16/08/2007, required the assessee to explain as to why the alleged share application money be not added as his income and required the assessee to make compliance on 20/08/2007. The Assessing Officer also took note of the allegation that since all the cheques through which share application money was received, were drawn on one bank i.e. Peoples Co-operative Bank Ltd., Kanpur, the subscription to the share capital is by providing placement made by the subscriber who are intimately connected to the promoter assessee company. From perusal of the copies of accounts of all these parties, he found that prior to withdrawal of money, there was immediate deposit of cheques in their respective bank account. Since the copies of IT returns were not furnished and no specific source of income was stated, the Assessing Officer took that the creditworthiness of the share applicants has not been established as also they were not having any real source of income and as such he proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant. The addition, therefore, stood deleted. 4. In appeal, the learned D.R. supporting the grounds raised in appeal, contends that the identity of the share holder was not established. The Assessing Officer was not satisfied about the creditworthiness thereof. The learned CIT(A), however, has erred in applying the ratio of decision in the case of CIT vs. Lovely Export (P) Ltd. [2008] 216 CTR 195 (SC) as the existence of the share holders in this case was not known. It, therefore, has been contended that the decision taken by learned CIT(A) needs to be set aside. 5. On the other hand, the learned Counsel for the assessee, contends that the assessee has discharged the burden that lay upon him. The assessee has repaid the share application money also. All the requisite information about the identity and capacity including income-tax assessment particulars of the share applicants were on the record of the Assessing Authority even at the time when he prepared the draft assessment for approval and before passing the final assessment order on 24/08/2007. It is wrong to say that the identity of the share applicants was not known or that they were not in existence. The learned CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer. Under the peculiar facts and since after initiating enquiry u/s 133(6) of the Act, the Assessing Officer did not pursue the matter further with the share applicants nor required the assessee to produce them or further material in that regard, it has to be accepted that the appellant has discharged the burden that lay upon him u/s 68 of the Act. In this premise the conclusion reached by learned CIT(A), accepting the correctness of the claim and the documents and deleting the addition, is not found unreasonable, perverse or based on no evidence. The view entertained by him is thus found supported by the case of Commissioner of Income-tax Vs Orissa Corporation P. Ltd. [1986] 159 ITR 78 (SC). We, therefore, do not find any error in the decision to delete the addition of share application money in this regard and finding no merit in the grounds raised in appeal by Revenue, reject the same. 7. In ground No. 4, the learned CIT(A) deleted the disallowance of Rs.24,000/-the expenses relating to earlier years. 8. We have heard parties with reference to material on record. The CIT(A) accepted the contention of the assessee to be correct in view of the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder PAN ABMPG2019E and has also given confirmation. It was also explained that there was a single entry through bank account, which was amenable to full verification and thus, there being no adverse comment on this creditor and Assessing Officer s satisfaction that the other credits are also verifiable, he proceeded to delete the entire addition of Rs.15,40,000/- made by the Assessing Authority. 12. The learned D.R. assailing the impugned order contends that the learned CIT(A) acted on the prima facie evidence. The assessee had not offered any explanation and as such the credit of Rs.4,50,000/- being not verifiable, could not have been deleted. Reliance has been placed in the case of Commissioner of Income-tax Vs P. Mohanakala (SC) [2007] 291 ITR 278 (SC). As regards other three credits also, there is no justification to substitute his own satisfaction by the learned CIT(A) and thereby deleting the addition. 13. On the other hand, the learned Counsel for the assessee contends that the learned CIT(A) has coterminous power as that of the Assessing Officer. In fact this is a case where the assessee had discharged the burden that lay upon him u/s 68 of the Act and the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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