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TMI Blog2013 (5) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, the grounds raised by the assessee in this regard are allowed for statistical purposes. - I.T.A. NO.1447/M/2011, I.T.A. NO.2093/M/2011 - - - Dated:- 1-5-2013 - Shri D. Karunakara Rao And Shri Sanjay Garg,JJ. For the Appellant : Shri M. S. Mathuria For the Respondent : Shri Jitendra Yadav, DR ORDER Per D. Karunakara Rao, AM:- There are two appeals under consideration and they are cross appeals involving the same assessment year 2002-2003. For the sake of convenience, both the appeals are being clubbed and adjudicated in this common order. Ground wise and appeal wise adjudication is given in the following paragraphs. Firstly, we shall take up assessee's appeal. I.T.A. NO.1447/M/2011 (2002-2003) (By Assessee) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee filed the return declaring NIL income. AO assessed the income u/s 143(3) of the Act and determined the taxable income at Rs. 1.25 Cr on account of additions u/s 68, involving Share Application Money of two subscribers namely D. Kumar Trading Company Private Limited (Rs. 1 Cr) and M/s. Odyssey Corporation Limited (Rs. 25 lacs). During the assessment proceedings, AO noticed that assessee received Share Application Money amounting to Rs. 1.9 Cr and the AO came to the conclusion that the Share Application Money from two parties mentioned above is bogus and not genuine. For this proposition, relevant discussion is given by the AO reads as follows:- "However, in statement recorded in the assessment proceedings in SKS Ispat group, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siya. Based on the statement of Shri Lapasiya, AO treated the subscription amount of Rs. 1 Cr by M/s. D. Kumar Trading Company Limited to the assessee towards Share Application Money as unexplained and made addition u/s 68 of the Act. Matter travelled to the files of the CIT (A). 5. During the proceedings before the first appellate authority, CIT (A) allowed the claim of the assessee and deleted the addition made by the AO u/s 68 of the Act. While deleting the addition, CIT (A) gave a direction to the AO only with reference to addition of Rs. 1 Cr and not to the amount of Rs. 1.25 Cr. Para 18 of the CIT (A) is relevant in this regard. By interpreting the CIT (A) decision to the sum of Rs. 25 lacs, the assessee is in appeal before the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Money be deleted." 9. The above said para is very specific about the addition of Rs. 1 Cr on account of Share Application Money and the same is silent about the other sum of Rs. 25 lacs, the Share Application Money interpreted by the Odyssey Corporation Limited. The said para was drafted in a singular form and it does not indicate both the Share Application Money subscribers. Therefore, we are of the opinion that this issue involving Odyssey Corporation Limited should be set aside to the files of the CIT (A) for specific adjudication after granting a reasonable opportunity of being heard to the assessee. Accordingly, the grounds raised by the assessee in this regard are allowed for statistical purposes. 10. In the result, appeal f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dwarakadhish Investment Private Limited (2010-TIOL-617-HC-DEL-IT); the judgment of the Apex Court in the case of CIT vs. Divine Leasing Finance Ltd. (299 ITR 268) (SC) and also the judgment of the Hon'ble Supreme Court in the case of CIT vs. Lovely Exports (P) Ltd (216 CTR 195) (SC). These Apex Court decisions are relevant for the proposition which is as under:- "Can the amount of Share Application Money be regarded as undisclosed income u/s 68 of the Income Tax Act, 1961? We find no merit in this special leave petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the department is free to proceed to reopen their indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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