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TMI Blog2013 (8) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... rt] and CIT Vs. Lovely Exports P. Ltd. [2008 (1) TMI 575 - SUPREME COURT OF INDIA] - Decided partly in favour of assessee. - ITA No. 23/Ag/ 2012, ITA No. 39/Ag/2012 - - - Dated:- 26-7-2013 - Shri Bhavnesh Saini And Shri A. L. Gehlot,JJ. For the Petitioner : Shri Rajendra Sharma, Advocate For the Respondent : Shri S. L. Maurya, Sr. D. R. ORDER Per A. L. Gehlot,Accountant Member:- These cross appeals have been filed by the assessee and Revenue against the order dated 28.11.2011 passed by the learned CIT(A), Gwalior for A.Ys. 2008-09. 2. The effective grounds raised in these cross appeals are reproduced as below:- ITA No. 23/Ag/2012 by the Assessee:- "Ground No.1:- On the facts in the circumstances of the case the learned commissioner of Income Tax (Appeal) was not justified in retaining and confirming an additions of Rs.3,052,700/- on account of share application money u/s 68 of the Income Tax Act. The above addition may kindly be deleted. Ground No.2 On the facts in the circumstances of the case the learned commissioner of Income Tax (Appeal) was not justified in retaining a disallowance of 10% of certain expenses amounting to Rs.2,40,880/- on adhoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Vidya Ram (1000 shares), Shri Vasudev Singh (2000 shares), Shri Vijender Singh (1000 shares) and Smt. Arti Jain (2000 shares), though the share application money is stated to be received though cheques in these cases. However, it has been held by Hon'ble Calcutta High Court that even transaction carried through account payee cheque does not make it sacrosanct. The appellant is required to give supporting documentary evidence to prove identity and creditworthiness of the person from whom alleged share application money has been received alongwith genuineness of the transaction as required u/s 68 of the I.T. Act. The appellant has failed miserably to give any details whatsoever in respect of these seven alleged shareholders to whom total shares of 12238 shares valued at Rs.12,23,800/- have been issued. In respect of Shri Arvind Agarwal (1389 shares), Shri Amar Narain Maheshwari (5200 shares), Smt. Nirmala Devi (2600 shares), Shri Rajesh Maheshwari (2600 shares), Shri Pankaj Johri (1000 shares), Shri Rajeev Jain (1000 shares), Shri Rajesh Jain (1000 shares),Sarika Jain (1500 shares) and Alpana Jain (2000 shares), the appellant has simply given their PAN without any supporting do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2003) 263 ITR 289 that where subscription for share application money has been received from the public and the assessee has disclosed all the particulars including the addresses of the subscribers, the question of treating the same as unexplained credit does not arise. The Hon'ble jurisdictional M.P. High Court in case of CIT Vs. Metachem Industries (2000) 245 ITR 160 (M.P.) has also held that once it is established that the amount has been invested by a particular person, be it a partner or an individual, then the responsibility of the assessee is over. The assessee gives a satisfactory explanation regarding credit entry in its books of accounts of the previous year, then the burden cast on it is discharged and in that case that credit entry cannot be treated to be the income of the assessee especially when that person owns that entry. On perusal of records, it is seen that no adverse comments have been made by the A.O. on the details submitted nor any further query raised when case has been discussed from time to time and books of accounts produced and examined by the A.O. on 22.12.10 and 27.12.2010 before passing the order on 30.12.2010. Though Section 68 empowers the A.O. to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28,900) made by the A.O. is hereby, confirmed on the basis of facts above and after perusal of records." (* Correct amount is Rs.12,23,800/-) 5. The assessee and Revenue both are in appeal as the CIT(A) has allowed part relief. 6. The ld. Authorized Representative at the outset submitted that the assessee has not provided relevant documents and material for arguing the appeal. He submitted that for want of documents, he has taken a number of adjournments. Looking to the non-availability of relevant material, the ld. Authorized Representative submitted that the appeal may be decided on the basis of material available on record. 7. The ld. D.R. on the other hand, relied upon the order of the A.O. 8. We have heard ld. Representatives of the parties and records perused. We noticed that the CIT(A) has deleted the addition of Rs.1,50,000/-out of the total addition of Rs.88,81,900/- made by the A.O. on account of share application money. The CIT(A) deleted the said amount of Rs.1,50,000/- by accepting the assessee's contention that Rs.1,50,000/-was not pertaining to year under consideration. The CIT(A) found that the pertaining share application money of Rs.1,50,000/- was pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application in his order and Revenue has failed to point out any contrary material to the findings of the CIT(A). We have also noticed that the finding of the CIT(A) is fortified by judgment of the Hon'ble Punjab Haryana High Court in the case of Commissioner of Income Tax Vs. GP International Ltd. [2010] 325 ITR 25 (P H) wherein the Hon'ble Punjab Haryana High Court has followed a judgment of the Hon'ble Apex Court in the case of CIT Vs. Lovely Exports P. Ltd. [2009] 319 ITR 5 (S.C). In view of above discussions, we do not find any infirmity in the order of the CIT(A) in deleting the addition of Rs.56,79,200/-. Thus, the deletion of total addition of Rs.58,29,200/- (Rs.56,79,200 + Rs.1,50,000/-) is confirmed. Accordingly, ground of Revenue's appeal is dismissed. 10. Now coming to Ground No.1 of assessee's appeal, we find that the CIT(A) after considering the assessee's submission and the various judgments, the CIT(A) found that Section 68 clearly provides that the onus is laid upon the assessee to furnish all relevant information in respect of entries made in the books of account. Mere filing of Income tax file Nos. or PAN is not sufficient. The relevant share certificates a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cretion objectively and judicially on thebasis of relevant material. Arbitrarily adding a round figure or making estimated disallowance without any justification or basis for computation of the true income or profit is not justified. If profits shown by the appellant in its return are not accepted, it is for the A.O. to prove that the appellant has made more profits not declared in the books of accounts [Bhagwandas Khandelwal Vs. CST, 27 STC 388 (M.P.)]. However, considering the facts and circumstances, nature and turnover of the appellant coupled with the nature of expenses and maintainability of vouchers and as per appellant's own admission, disallowance @ 10% of these expenses claimed at Rs.24,08,819/- which works out to Rs.2,40,880/- is found reasonable and justified. The same is, hereby, confirmed." 13. We have heard ld. Representatives of the parties and records perused. We noticed that the A.O. made addition out of various expenses as theexpenses were not fully vouched. However, the CIT(A) found that as per assessee's own admission regarding non-maintenance of proper vouchers, the CIT(A) found that 10% of such expenses will be reasonable to cover the deficiencies. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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