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TMI Blog2012 (12) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... the identity of the share applicants and by placing reliance on the decision of the Apex Court in the case of M/s Lovely Exports Pvt. Ltd. besides other cases like Dhirajlal Girdhari Lal v. CIT, 261 TR 736?" 2. The facts necessary for deciding this case are that for AY 2007-08, the AO held that the assessee had received Rs.4,34,00,000/- as unexplained credit in the form of share application money from 9 applicants. After considering the materials on record, including the documentary evidence furnished by the assessee such as PAN numbers, detailed particulars of the addresses, audited accounts and bank statements of the share applicants etc. and lastly the return of allotment filed by the assessee with the ROC, the AO was of the opinion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their Pan or income-tax assessment number and shows the genuineness of transaction by showing money in his books either by account payee cheque or by draft or by any other mode, then the onus of proof would shift to the Revenue-just because the creditors/share applicants could not be found at the address given, it would not give the Revenue the right to invoke s. 68 - Revenue has all the power and wherewithal to trace any person - Moreover, it is settled law that the assessee need not to prove the „source of source‟ - In the instant case, the tribunal has confirmed the order of the CIT (A) deleting the impugned addition holding that the assessee has been able to prove the identity of the share applicants and the share applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal of the appellant is allowed" 4. The Revenue‟s appeal was rejected by the ITAT which held as follows: - "6. We have heard the rival contentions in the light of the material produced and precedent relied upon. We find that in this case the assessee has furnished the basic information in this regard. These were certificate with regard to share application, bank statement showing the name of the assessee company, copy of income tax returns, copy of the audited balance sheet and copy of addition information as required under the Companies Act in all the five cases. Thus, the identity of these share applicants is duly established. The Assessing Officer has also not disputed the identity of share applicants. In these circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal. It was submitted that the decision of the Supreme Court in CIT v. Lovely Exports (P) Ltd. 216 CTR 195 only requires that the assessee should, in order to discharge the onus which falls upon it in the first instance whenever Section-68 is sought to be invoked, furnish such materials as are necessary and in its possession. This would be in the form of proof of identity of the share applicants, its PAN, addresses, materials evidencing its existence such as relevant extracts of the ROC register or returns etc. Once this burden is discharged, the onus shifts back to the AO who has to then in order to dislodge the burden make further enquiries and satisfy himself that indeed the amount is to be added back under Section 68. 7. Learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company, Notice u/s 133 (6) sent to above entities for calling the information and their existences. But the Notices were received back unserved from the addresses provided by the AR. Accordingly, vide order sheet entry dated 17/12/2009 the AR was asked that "You have given the details of investors during the assessment proceedings but Notices u/s 133 (6) sent to these entities for calling the information, received back unserved from the most of the addresses provided by you. Please explain and produce the Directors of these entities. In reply to the above query, AR filed letter dated 21/12/09 and replied that all the subscribers are private limited companies duly incorporated under the provisions of Companies Act, 1956, having a distinct, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccurate particulars of income, penalty proceedings u/s 271 (1) (c) is being initiated separately." 9. As noticed previously, the CIT (A) was of the opinion that the assessee had discharged the basic onus which was cast upon it after considering the ruling in Lovely Exports matter (supra). The material and the records in this case show that notice issued to the 5 of the share applicants were returned unserved. The particulars of returns made available by the assessee and taken into consideration in paragraph 3.4 by the AO in this case would show that the said parties/applicants had disclosed very meager income. The AO also noticed that before issuing cheques to the assessee, huge amounts were transferred in the accounts of said share applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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