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TMI Blog2013 (12) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee except being investors by making payment of the application money - Decided in favour of assessee. - I. T. A. No. 7426/Mum/2012 - - - Dated:- 4-12-2013 - Sri Vijay Pal Rao, JM And Shri N. K. Billaiya, AM,JJ. For the Petitioner : Shri B. V. Jhaveri For the Respondent : Shri Pitambar Das ORDER Per Vijay Pal Rao, JM: This appeal by the assessee is directed against the order dated 17.10.2012 of CIT(A) for the assessment year 2009-10. The assessee has raised following grounds:- 1. "The learned Commissioner of Income Tax (Appeals erred in confirming the additions made by the Learned Assessing Officer, u/s 68 by treating the share application money of Rs.98,00,000/- received from M/s Patel Enterprise and Rs.2,00,000/- received from M/s Mercury Developers as unexplained cash credit without appreciating the fact that the assessee has discharged its onus of proving the genuineness of share application money aggregating to Rs.10,000,000/-. The Learned Commissioner of Income Tax (Appeals) erred in not appreciating the various judicial precedents argued by the appellant. 2. The Learned Commissioner of Income Tax (Appeals) erred in confirming the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties. The AO has not disputed the details and the record in the shape of bank account and confirmation of accounts by the parties. The assessee has also produced the return of income of the parties with PAN number which established the identity and capacity of the creditors. The creditors are assessed to tax and the application money has been paid from the bank account. He has referred the bank account of the Patel Enterprises and submitted that the major sources of money is transferred from the credited account and overdraft facilities availed by the creditor and therefore, the assessee has established the sources and capacity of the creditor for payment of 98 lakhs as share application money. The ld. AR has further pointed out that since the transaction of allotment of shares could not be materialized because of some disputes between the parties and therefore the assessee refunded the entire share application money to the creditors. He has referred at page 18 to 21 of the paper book to show the details and the statement of bank accounts from where the entire receipt and repayment of the share application money has been explained. He has pointed out that the assessee has refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to produce Shri Nasir Ahmed Khan the proprietor of Ms. Patel Enterprises. When the AO has not made any inquiry with regard to the evidence produced by the assessee then the addition made by the AO is not sustainable. He has further contended that the production of the creditor is beyond the control of the assessee and the AO can exercise its powers for ensuring the presence of the creditors. The assessee produced all the relevant evidences to prove and discharge its onus. He has referred the decision of the Hon'ble Supreme Court in the case of Lovely Exports Pvt. Ltd. (supra) and submitted that when the share application money is received by the assessee from shareholders whose name is given to the Assessing Officer, then the department is free to proceed to reopen their individual assessment in accordance with law but it cannot be regarded as undisclosed income of the assessee. Thus, the ld. AR has urged that the addition made by the AO be deleted in view of the various decisions relied upon by him. 4. On the other hand the ld. DR has submitted that the assessee has provided only the identity of the creditors but fail to establish the creditworthiness of the creditors and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prove that the evidence produced by the assessee is not correct or bogus. We further noted that the creditors are assessed to tax and the assessee furnished all the details regarding the return of income and PAN numbers of the creditors. Therefore, there is no dispute regarding the identity of the creditors. Even, otherwise, the AO has also disputed the identity of the creditors. As far as the creditworthiness of creditor is concerned when the assessee has furnished the complete details of the bank accounts including the amounts deposited in the bank accounts and sources of the said deposited, then the assessee has discharged its onus of proving the capacity and the sources of the application money. If the AO still doubts the capacity and genuineness of the sources of deposit in the bank account of the creditors then it would be a subject matter of assessment in the hand of the creditors and cannot be a ground for treating the amount as unexplained cash credit in the hands of the assessee. The AO has accepted that in the case of Patel Enterprises, a sum of Rs.56,00,000/- was transferred from the overdraft account. The overdraft was raised from the current account and other amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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