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TMI Blog2017 (3) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... share application money by cheque and no cash was given to Bhagwan Krishan Investment & Trading Co Pvt Ltd. The fact that no amount of cash was ever given to the company which is proved by the fact that the bank account of the investor-company Punjab National Bank, Azadpur Branch, (which was also furnished to the Assessing Officer - shows that there is no such cash deposit in the bank account of the said company and that the amount of share application money is received out of sale consideration of old investments. Even after asking by the assessee the Assessing Officer has not issued any summons under section 131 or notice under section 133(6) to the Directors of Bhagwan Krishan Investment & Trading Co Pvt Ltd. and has concluded only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R.C SHARMA, AM AND SHRI RAVISH SOOD, JM For The Assesseee : Shri. NeelkantKhandelwal Respondent : Dr. Santosh Mankoshar ORDER PER R.C.SHARMA (A. M): This is an appeal filed by the assessee against the order of CIT(A)-6, Mumbai dated 19/10/2015 for the assessment year 2005-06 in the matter of order passed uls.143(3) r.w.s. 147 254 of the IT Act, 1961. 2. The following grounds have been taken by the assessee. 1. The Commissioner of Income-tax (Appeals) - 6, Mumbai (hereinafter referred to as the CIT(A)) erred in confirming the action of the Income-tax Officer 2(3)-4, Mumbai (hereinafter referred to as the Assessing Officer) in issuing notice under section 148 of the Act. The appellants contend that on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion money received from Bhagwan Krishan Investment and Trading Co Pvt Ltd. 4. It was contended by Ld. A.R that original assessment was framed under Section 143(3) on 31/12/2007, and the notice for reopening of assessment was given on 23/03/2012 which is much beyond a period of 4 years from the end of relevant assessment year. Accordingly reopening assessment was invalid, since the original assessment was framed under section 143(3) and there was no failure on the part of the assessee to furnish return under section 139 or in response to notice issued under section 142(1) or 148 or to disclose fully and truly all material facts necessary for his assessment. 5. On merit of addition it was submitted that the assessee has furnished all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the contention that without allowing cross examination, no addition can be made. The reliance was placed on the following judicial pronouncements: CIT v. SMC Shares Brokers Ltd. 288 ITR 345(Del) MahesGulabrai Joshi v. CIT [2005] 95 ITD 300 (Mum)(SMC) Yamuna Synthetics P. Ltd. v. DCIT [2004] 3 SOT 25 (Del) 8. The Ld. AR has further relied on the decisions in the following cases in support of the proposition that no addition can be made on account share capital when identity of shareholders has been proved. 1) CIT v. Divine Leasing Finance Ltd. [ 299 ITR 268-(Del)] 2) CIT v. Lovely Exports P. Ltd. [172 Taxman 44 (SC)] 3) CIT v. Value Capital Service P. Ltd. (order dated 25/04/2008) 9. On the other hand, Ld. DR cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee company. 12. In respect of the share application money received from Bhagwan Krishan Investment Trading Co Pvt Ltd, assessee had furnished details such as copy of share application form, certified copy of memorandum articles of association, certified copy of board resolution, certified copy of the auditors' report and balance sheet as on 31st March, 2005 and so on, in support of the genuineness of the transaction of share application money. AO made addition merely on the basis of statement of Pradeep Kumar. 13. The statements of Mr Pradeep Kumar (as supplied to the assessee) are not correct for the reason that the assessee has received share application money by cheque and no cash was given to Bhagwan Krishan Investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the balance available in their bank account. 16. The Assessing Officer has also not allowed cross examination of Mr Pradeep Kumar, inspite of specific request by assessee and hence, his statement on oath has no evidentiary value and hence required to be ignored. 17. We found that Assessee Company has received application for allotment of preference shares, which have been allotted by the assessee company and identity of share applicant has also been proved by the assessee and hence, the share application money could not be added as income in the hands of the assessee company. In CIT v. Stellar Investment Ltd. (1991) 192 ITR 287, 288 (Del) it was held that It is evident that even if it be assumed that the subscribers to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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