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TMI Blog2014 (11) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petition of the department, their lordships held that if share application money is received by the assessee company from alleged bogus shareholders whose names are given to the AO, then the department is free to proceed to reopen their individual assessment in accordance with law. Under the facts and circumstances of the present case, we are in agreement with the conclusion of the CIT(A) that once the identity of the investor has been manifested and proved by the assessee by submitting their names, addresses, PAN Nos. and other relevant details, then the capital receipt of share application money cannot be said to be the undisclosed income of the assessee and addition u/s 68 of the Act is not sustainable. However, the AO is free to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare application money as unexplained credit u/s 68 of the Income Tax Act, 1961. The aggrieved assessee preferred an appeal before the CIT(A) which was allowed by passing the impugned order. Now, the aggrieved revenue is before this Tribunal with the sole ground as reproduced hereinabove. 4. Apropos the only ground raised by the revenue, we have heard arguments of both the sides and carefully perused the relevant material placed on record including reassessment order, impugned order of the CIT(A), Paper Book filed by the assessee spread over 87 pages and ratio of the decisions relied by both the parties. Ld. DR submitted that the AO reopened the assessment by way of issuing notice u/s 148 of the Act and objections to the reopening of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details and explanation of the assessee and simply relied on the statement of the so-called entry providers recorded by the Investigation Wing of the Department on the back of the assessee and the assessee was not provided due opportunity of cross-examining these so-called entry providers. Ld. Counsel vehemently contended that the AO took a hyper technical approach in rejecting the evidence and explanation of the assessee at the threshold without any examination and verification and the AO was also not justified in making the addition simply relying on the statement of the so-called entry providers recorded by the Investigation Wing on the back of the assessee. 6. On careful consideration of above submission and factual matrix of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , then additions should have been made in the case of investor company and not in the hands of the appellant company. The appellant has relied upon the decision of Hon'ble Supreme Court in CIT Vs DIVINE LEASING FINANCE LTD. (CC 375/2008) dated 21/01/2008 wherein it was held - We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee-Company from alleged bogus shareholders, whose names are given to the AO, then the Department, is free to proceed to re-open their individual assessments in accordance with law. 7.12 Reliance in this regard is also placed on the decision of Hon'ble Delhi High Court in the case of CIT vs. Pondy Metal and Rolling Mill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged entry providers recorded by the Investigation Wing accepting the same as gospel truth without affording opportunity of cross-examination to the assessee. At this juncture, we respectfully take guidance from the decision of Hon ble Apex Court in the case of CIT vs Divine Leasing and Finance Ltd. (supra) wherein dismissing the special writ petition of the department, their lordships held that if share application money is received by the assessee company from alleged bogus shareholders whose names are given to the AO, then the department is free to proceed to reopen their individual assessment in accordance with law. Under the facts and circumstances of the present case, we are in agreement with the conclusion of the CIT(A) that once ..... X X X X Extracts X X X X X X X X Extracts X X X X
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