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TMI Blog2022 (6) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... he said fact would not assist the case of the department, for the reason that the same only refers to the period of allotment of shares which had occasioned during the previous year under consideration and not the credit of the amount in the books of account of the assessee company during the said period Our aforesaid view that an addition u/s.68 of the Act cannot be divorced from the year in which the same is credited in the books of account of the assessee is fortified by the judgment of the Hon'ble High Court of Delhi in the case of CIT Vs. Usha Stud Agricultural Farms Ltd. [ 2008 (3) TMI 91 - DELHI HIGH COURT] - In its aforesaid order the Hon'ble High Court while approving the order of the Tribunal, had held, that as the credit balance appearing in the accounts of the assessee did not pertain to the year under consideration, therefore, the A.O was not justified in making an addition of the same u/s. 68 . Also, our aforesaid view that where the assessee had received share application money in the earlier year and, only shares were allotted to the applicants during the year under consideration, then, the provisions of Section 68 of the Act could not be invoked to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y assessment u/s. 143(2) of the Act. 3. On a perusal of the details before him, it was observed by the A.O that the assessee company had during the year under consideration claimed to have received share application money of Rs. 3 crore from M/s. MSP Mining Minerals Pvt. Ltd., a group company, towards subscription of its 12,000 shares of a face value of Rs. 10/- a/w. share premium of Rs. 2,490/- per share. It was observed by the A.O that shares were thereafter allotted to the aforesaid share subscriber, viz. M/s. MSP Mining Minerals Pvt. Ltd. In order to verify the genuineness and veracity of its claim of having received the aforesaid amount of share application money the A.O called upon the assessee to place on record supporting documentary evidence. In compliance, the assessee came forth with the requisite details as were called for by the A.O. However, on a commission stated to have been issued by the A.O u/s. 131(1)(d) of the Act, it was gathered by him that the aforesaid share subscriber i.e, a Kolkata based company was not available at the given address. Observing that the assessee company had failed to substantiate the authenticity of its claim of having received the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the investor company i.e., the group company had made a strategic investment in its shares was nothing but a hollow claim that was bereft of any supporting material, the CIT(appeals) rejected the same by dubbing it as an uncorroborated claim. Accordingly, the CIT(Appeals) sustained the view taken by the A.O and held the charging of share premium by the assessee as totally unjustified. 5. Apropos the alternative claim of the assessee that as the share application money was received and credited in its books of account in the previous year relevant to the immediately preceding assessment year i.e., AY. 2011-12 and not during the previous year pertaining to the year under consideration, the same, thus could not have been held as an unexplained cash credit u/s. 68 of the Act for the year under consideration, the same too did not find favor with the CIT(Appeals). Fortifying his aforesaid conviction, it was observed by the CIT(Appeals) that the investor company, viz. M/s. MSP Mining Minerals Pvt. Ltd. had in its audited accounts clearly shown the investment in the shares of the assessee company during the year under consideration and not prior thereto. Backed by his aforesaid o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... APB, which reads as under: Sl. No. Date Bank Name Cheque No. Amount 1. 14.02.2011 HDFC Bank, 204, MashurawalaBaug, Dharampeth Extn., Shankar Nagar Road, Nagpur-440010 ( Maharashtra) 572860 5000000 2. 02.03.2011 HDFC Bank, 204, MashurawalaBaug, Dharampeth Extn., Shankar Nagar Road, Nagpur-440010 ( Maharashtra) 572861 5000000 3. 03.03.2011 HDFC Bank, 204, MashurawalaBaug, Dharampeth Extn., Shankar Nagar Road, Nagpur-440010 ( Maharashtra) 572862 10000000 4. 15.03.2011 HDFC Bank, 204, MashurawalaBaug, Dharampeth Extn., Shankar Nagar Road, Nagpur-440010 ( Maharashtra) 572868 10000000 Total Payment 30000000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany had not credited the amount in question in its books of account for the year under consideration, therefore, the addition made by the A.O u/s. 68 of the Act could not be sustained and was liable to be struck down on the said count itself. 9. Per contra, the Ld. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. It was submitted by the Ld. DR that as the assessee has failed to prove the 'nature' and 'source' of the amount of Rs. 3 crore (supra) credited in its books of accounts, therefore, the A.O had rightly held the same as an unexplained cash credit u/s. 68 of the Act. 10. After having given a thoughtful consideration to the aforesaid claim of the assessee i.e., qua the sustainability of the addition of Rs. 3 crore (supra) made by the AO u/s. 68 of the Act, which had been, inter alia, assailed by the assessee before us, for the reason that the amount in question was credited in its books of account in the previous year pertaining to the immediately preceding assessment year i.e., AY 2011-12 and not during the year under consideration, we find substantial force in the same. On a perusal of the bank accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal, had held, that as the credit balance appearing in the accounts of the assessee did not pertain to the year under consideration, therefore, the A.O was not justified in making an addition of the same u/s. 68 of the Act. Also, our aforesaid view that where the assessee had received share application money in the earlier year and, only shares were allotted to the applicants during the year under consideration, then, the provisions of Section 68 of the Act could not be invoked to make an addition in the hands of the assessee during the subsequent year i.e, the year in which shares were allotted is supported by an order of the co-ordinate Bench of the Tribunal i.e, ITAT, Kolkata in the case of DCIT, Circle-1 Vs. Global Mercantiles (P). Ltd. (2016) 67 taxmann.com 166 (Kol-Trib). On the basis of our aforesaid deliberations, we are of the considered view, that as the amount of share application money of Rs. 3 crore (supra) was received and credited in the books of account of the assessee for the immediately preceding year i.e., AY 2011-12 and not in the year under consideration, therefore, there was no justification for the AO to have made an addition of the same as an unexplai ..... 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