TMI Blog2015 (3) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... the information received from the Investigation Wing of the department which is not a proper approach. From the assessment order, we observe that the assessee claimed to have received share application money of ₹ 1,01,77,000 during the year under consideration but the AO disputed the four transactions on the basis of information of Investigation Wing of the department. The AO issued summons u/s 131 of the Act to these four entities. The summon to M/s Samrendra Leathers Pvt. Ltd. was returned by postal authorities with the remark “Lock closed” and the summons u/s 131 of the Act to other three entities was received unserved with the common remark “no such person at the given address”. Thus respectfully taking note of decision of CIT vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase was selected for scrutiny assessment and the AO made certain disallowances including an addition of ₹ 21 lakh u/s 68 of the Income Tax Act, 1961 on account of introduction of bogus share capital. The assessee preferred an appeal which was allowed by directing the AO to delete the impugned addition made u/s 68 of the Act. Now, the aggrieved revenue is before this Tribunal with the sole ground as reproduced hereinabove. 3. Apropos sole ground of the assessee, we have heard arguments of both the sides and carefully perused the relevant material placed on record, specially assessment order as well as impugned order of the CIT(A). Ld. DR submitted that the AO rightly observed that the assessee had received ₹ 21 lakh as share a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the assessee submitted all details before the AO but the AO proceeded to make addition in a hasty manner ignoring the fact that the assessee vide its reply dated 8.10.2009 furnished a chart showing names along with addresses of the 15 parties from whom share application money was received with their share application form and PAN No. The AR further submitted that the assessee has also furnished copies of the affidavits in respect of all parties along with copies of the return of income. The AR further contended that the AO simply considered the note of postal authorities in three cases and the AO without verifying the explanation and detail submitted by the assessee and without allowing opportunity for the assessee to cross-ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 order dated 12.08.2010) and CIT v. Ultratech Finance Investment Ltd. (ITA no. 1122/2010 order dated 12.08.2010). In the case of-Dwarkadhish Investment Pvt. Ltd. and Dwarakdhish Capital Pvt. Ltd. (supra) the Hon'ble jurisdictional High Court vide its common order dated 02.08.2010 has interalia observed as under: 7. Consequently, the doctrine of merger would apply and the judgment of the Supreme Court in Lovely Exports (P) Ltd. (supra) would cover the field with regard to interpretation of Section 68 of Act, 1961. 8. In any matter, the onus of proof is not a static one. Though in Section 68 proceedings, the initial burden of proof lies on the assessee yet once he proves the identity of the creditors/share applicants by either f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cata. But if the same issue is sought to be reagitated, it also amounts to an abuse of the process of the court.... 12. Though we were initially inclined to impose costs yet we are of the opinion that ends of justice would be met by giving a direction to the Revenue to be more careful before filing appeals in a routine manner, In our view, appeal should not be filed in matters where either no question of law arises or the issue of law is a settled one. We give this direction because the 'judicial capital in terms of manpower and resources is extremely limited. 13. Registry is directed to communicate copies of this order to all the Chief Commissioners of Income Tax in Delhi for necessary action. With the aforesaid direction, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee s explanation in such cases cannot be rejected merely on the basis of surmises and conjectures. In the present case, when the summons issued to the alleged investors could not be complied with, without any further effort and verification, the AO proceeded to make an addition u/s 68 of the Act merely relying on the information received from the Investigation Wing of the department which is not a proper approach. From the assessment order, we observe that the assessee claimed to have received share application money of ₹ 1,01,77,000 during the year under consideration but the AO disputed the four transactions on the basis of information of Investigation Wing of the department. The AO issued summons u/s 131 of the Act to these four en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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