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TMI Blog2011 (4) TMI 1433X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 2. On the facts and in the circumstances of the case, the Ld. CIT(A)-III, Surat ought to have upheld the order of the Assessing Officer. 3. It is therefore prayed that the order of the Ld. CIT(A)-III, Surat may be set aside and that of the Assessing Officer be restored. 2. Facts, in brief, as per the relevant orders are that return declaring income of ₹ 9,96,000/- filed on 28-10-2005 by the assessee, manufacturing yarn on job work basis, was selected for scrutiny with the service of a notice u/s. 143(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act) on 26-10-2006. During the course of assessment proceedings, the Assessing Officer[AO in short] noticed that the assessee received an amount of ₹ 53 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely Nupur Mitra of AA 273 alt Lake, Kolk- 64 and Niraj Agarwal of 159 Rabindra Sarani, Kolkata. Niraj Agarwal is not available at the given address. Nupur Mitra, a school teacher, denied having any association with Prerana Supply Pvt. Ltd. Despite our whole- hearted efforts these alleged investors could not be traced. As such, share holders, namely, Sahi Agencies (Shipping) Pvt. Ltd., Prerana Supply Pvt. Ltd., Mitra Finance Lease Pvt. Ltd. and Rich Point Financial Services Pvt. Ltd., could not be said to be genuine. Bhandari Financial Services P. Ltd. has shown the investment of ₹ 10 lakhs made in the shares of Salasar Yarns Pvt. Ltd., out of application money received on account of share application from Admice Vinimay Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umati Dayal v.CIT Bangalore (1995)(Supp.)(2 SCC 453)., CIT v. Durga Prasad More (1971) 82 ITR 540 (SC), CIT v. Precision Finance Pvt. Ltd. (1994) 208 ITR 465 (Cal.),CIT vs. Korlay Trading Cp. Ltd.,232 ITR 820(Cal.) and Nemi Chand Kothari v. CIT (2003) 264 ITR 254 (Gau.), the entire amount of ₹ 53 lakhs was added u/s. 68 of the Act. 4. On appeal, the Ld. CIT (A) deleted the addition in the following terms:- " I have gone through the submissions and the documents. It is seen that all these companies were registered under the Companies Act and are regularly assessed to tax in Calcutta. It is also seen that the AO issued notices directly to these companies at the given addresses which were duly served and details reply to these no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an ₹ 9 crores in the case of these four companies. Therefore, I am of the view that the genuineness of the share applicant, their creditworthiness and the transactions are established and there is no case for any addition u/s. 68 of the I. T. Act in this case. The Ld. AR also drew my attention to the judgment of Hon'ble Supreme Court in the case of CIT vs. Lovely Export Pvt. Ltd. 216 CTR 195 and decision of various High Courts regarding this issue which has been decided in favour of the appellant. I have gone through the decision of the Hon'ble Supreme Court wherein it has been held that the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the A.O., the Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odhpur), Shree Barkha Synthetics Ltd. vs. ACIT,283 ITR 377(Raj.), CIT vs. Down Town Hospital Pvt. Ltd.,267 ITR 439(Gau.),CIT vs. Sophia Finance Ltd.,205 ITR 98(Del.), and CIT vs. Gobi Textiles Ltd.,294 ITR 663(Mad.) and rejected a similar report of Addl. DIT(Inv.),Kolkatta in relation to shareholders M/s Bhandari Financial Services Pvt. Ltd., Hanuman Coke Plant Pvt. Ltd., Mira Finance Lease Pvt. Ltd., and Sahi Agency Shipping Pvt. Ltd..Accordingly, it was concluded that once identity of shareholders is established , no addition can be made u/s 68 of the Act. In the instant case also, identity of the shareholders has been established before the ld. CIT(A) while discarding the report of Addl. DIT(Inv.). In these circumstances, there appears t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench, in fact, clarified that they were not deciding as to whom and to what extent is the onus to show that an amount credited in the books of account is share capital and when does that onus stand discharged. This will depend on the facts of each case. Recently, Hon'ble Apex Court while affirming the order of the Hon'ble Delhi High Court in CIT Vs. Lovely Exports (Pvt. ) Ltd. & CIT Vs. Divine Leasing & Finance Ltd.,299 ITR 268(Del.) in 216 CTR (SC) 195 held that if the share application money is received by the assessee company from the alleged bogus shareholders, whose names are given to the AO, then the Department is free to reopen their individual assessments in accordance with law. Thus, the Hon'ble Apex Court held that i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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