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TMI Blog2013 (1) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... h directed deletion of Rs.55,50,000/- added on account of unexplained share application, added by the Assessing Officer in the case of the assessee under Section 68 of the Act?" The learned counsel for the revenue/ appellant submitted that the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal were both wrong in deleting the addition of Rs.55.5 lakhs on account of unexplained share application money under section 68 of the Income Tax Act, 1961 (hereinafter referred to as „the said Act‟). The present case pertains to the assessment year 2004-05. The assessment proceedings were completed by the assessing officer on 16.12.2009. The assessment order indicates that initially the respondent was asked to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2011. The CIT (Appeals) held that the documents/ details submitted by the respondent/ assessee indicated that the identity of the share applicants stood established beyond any doubt. Particularly so, because each of the share applicants was an income tax assessee. The CIT (Appeals) held as under: - "The genuineness of the transactions are established as the transactions are routed through banking channels. It is seen that the share application money was received through a/c payee cheques, detail of which had been filed by the appellant by filing the copy of the bank a/c of the share applicants. Thus where the return of income is filed by the creditors of the assessee and is accepted by the Department, and the payments are through a/c paye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8223;ble Supreme Court in the case of M/s Lovely Export Pvt. Ltd. which is directly on the issue of share capital and in view of the decisions cited above the addition on account of share capital cannot be sustained. The AO has no where proved that documents in support of the identity of the party have not been placed on record or they were forged documents. The AO also has not brought any evidence on record regarding the facts that the share applicants were not creditworthy or genuine, despite the fact that their PAN and confirmatory affidavit and the details of the AO where the share applicants were assessed were submitted by the appellant alongwith copy of bank accounts of the share applicants. In view of the findings above and the judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and evidences filed by the assessee are in any manner false and fabricated, and assessee has not been able to discharge its initiation onus. Therefore, in the light of the detailed discussions made by the CIT(A) in his order and for the reasons given by him, we are in full agreement with him in deleting the addition of Rs.55,50,000/- made by the AO after giving a finding by him that the AO has nowhere been able to prove that the document in support of the identity of the parties have not been placed on record or otherwise there were forged documents, and further the AO has also not brought any evidence on record regarding the facts that the share applicants were not creditworthy or genuine despite the fact that their PAN and confirmatory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re applicants in accordance with law. We are afraid that we cannot apply the ratio to a case, such as the present one, where the Assessing Officer is in possession of material that discredits and impeaches the particulars furnished by the assessee and also establishes the link between self-confessed "accommodation entry providers", whose business it is to help assessees bring into their books of account their unaccounted monies through the medium of share subscription, and the assessee. The ratio is inapplicable to a case, again such as the present one, where the involvement of the assessee in such modus operandi is clearly indicated by valid material made available to the Assessing Officer as a result of investigations carried out by the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Here the assessing officer, after noting the facts, merely rejected the same. This would be apparent from the observations of the assessing officer in the assessment order to the following effect: - "Investigation made by the Investigation Wing of the Department clearly showed that this was nothing but a sham transaction of accommodation entry. The assessee was asked to explain as to why the said amount of Rs.1,11,50,000/- may not be added to its income. In response, the assessee has submitted that there is no such credit in the books of the assessee. Rather, the assessee company has received the share application money for allotment of its share. It was stated that the actual amount received was Rs.55,50,000/- and not Rs.1,11,50,000/- as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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