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TMI Blog2011 (6) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... ndividual assessments in accordance with law. In the case of COMMISSIONER OF INCOME TAX VERSUS STELLER INVESTMENT LTD. [ 2000 (7) TMI 76 - SC ORDER] , the Supreme Court agreed with the decision of the Delhi High Court in the case of COMMISSIONER OF INCOME-TAX VERSUS STELLAR INVESTMENT LIMITED [ 1991 (4) TMI 100 - DELHI HIGH COURT] , wherein the Court had held that, it is evident that even if it is assumed that the subscribers to the increased share capital were not genuine, nevertheless, under no circumstances, can the amount of share capital be regarded as undisclosed income of the assessee. It may be that there are some bogus shareholders in whose names shares had been issued and the money may have been provided by some other persons. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crutiny of the accounts found that the assessee had introduced cash in its books in the form of share capital from 12 persons. Out of these 12 persons, cash related to 7 persons have been offered for tax under VDIS, 1997 considering the unexplained cash. In relation to other 5 persons, the AO found that the assessee company could not explain the source of money introduced in its books of account in the names of (1) Jakir G. Bilakhia, (2) Shamim G. Bilakhia, (3) Uday Vaidya, (4) Rasidha G. Bilakhia and (5) Bhavna N. Babbharolia. After detailed examination of the facts and circumstances of the case, the AO arrived at the conclusion that the creditors were not creditworthy and they were not assessed to tax; hence, the assessee has failed to ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A perusal of the assessment order shows that the AO has held that the creditworthiness of the cash creditors is doubtful and such creditors are either the relatives of the assessee or such other persons who were not assessed to tax in the year 1992-93. No such investments had been offered by them under VDIS, 1997. Under the circumstances, the AO added a sum of ₹ 4,30,760 as unexplained cash credit under s. 68 of the Act. A perusal of the order made by the CIT(A) indicates that the CIT(A) has merely confirmed the order of the AO by placing reliance upon a decision of the jurisdictional High Court in the case of Bomin (P) Ltd. vs. CIT (1986) 52 CTR (Guj) 391: (1986) 160 ITR 477(Guj). The Tribunal, in the impugned order, has held thus : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law. In the case of CIT vs. Steller Investment Ltd. (2000) 164 CTR (SC) 287: (2001) 251 ITR 263(SC), the Supreme Court agreed with the decision of the Delhi High Court in the case of CIT vs. Steller Investment Ltd. (1991) 99 CTR (Del) 40 : (1991) 192 ITR 287 (Del), wherein the Court had held thus : "It is evident that even if it is assumed that the subscribers to the increased share capital were not genuine, nevertheless, under no circumstances, can the amount of share capital be regarded as undisclosed income of the assessee. It may be that there are some bogus shareholders in whose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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