9911796707
TMI Blog2018 (6) TMI 1860X X X X Extracts X X X X X X X X Extracts X X X X ..... Y. 2003-04, raising the following grounds: "1. That the authorities below have erred in law and on facts in making addition amounting to Rs.59,80,000/- being the share application money, received even when the identity genuineness and creditworthiness of the transactions were proved in unequivocal terms. 2. That the learned A.O. has erred in law and on facts in making the addition without bringing on record any material to substantiate that the share application money emanated from the coffers of the appellant. 3. That the learned Assessing Officer has erred in charging interest u/s 234A amounting to Rs. 43,348/- and u/s 234B amounting to Rs. 30,56,047/-." 2. The facts are that order dated 29.12.2010 was passed under sections 143(3)/147 of the Act at a total income of Rs.59,07,149/-, wherein an addition of Rs.59,80,000/- was made on account of unexplained cash credits in the form of share application money received during financial year 2002-03, invoking the provisions of section 68 of the Act, in respect of the following parties: Name of share applicants Share application money received J SINGH TRADING & INVESTMENT PVT. LTD. 500,000 300,000 MODI ROAD LINES PVT, LTD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in my humble view and while keeping in view the catena of case laws that have been rendered in respect of addition made u/s 68 by an AO, the case of the appellant ought to be perused in the light of the peculiar facts it presents and as duly brought on record by the AO. In this it is relevant to refer to a subsequent decision of Hon'ble Calcutta High Court as rendered in the case of CIT vs. Ashok Timber Industries reported as 125 ITR 336 (Cal.), wherein the Hon'ble High Court while considering the decision of the Hon'ble Apex Court in Bharat Heavy Engineering & Construction (supra), and answering the undernoted question of law which was based upon the aforesaid decision of Hon'ble Apex Court, has held as under:- "whether, on the facts and in the circumstances of the case, and on a correct interpretation of section 68 of the Income-tax Act, 1961, the Tribunal was right in holding that the unexplained cash credits amounting to Rs. 8,100 appearing within one month of the commencement of the business in the books maintained for the previous year relevant to the assessment year 1963-64 were not taxable as the income of the assessee of the said previous year?" The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion- in the negative and in favour of the revenue. 6.3 Further, the coordinate Bench of Hon'ble ITAT, Hyderabad 'A' Bench Hyderabad, vide its decision rendered in the case of Shri B. Srinivasulu vs. ITO Ward 6(4), Hyderbad ITA No. 647/Hyd/2009 AY 2005-06 Date of Decision 04.06.2010, has followed the above decision of Hon'ble Calcutta High Court. The Hon'ble ITAT has held as under:- "We have carefully gone through the judgment of the Calcutta High Court in the case of Ashok Timber Industries (supra). The Calcutta High Court after considering the judgment of Apex Court in the case of M/s Bharat Engineering and Construction Company (supra) found that the judgment of the Apex-Court was rendered in the context of Income Tax Act 1922. After introduction of Sec. 68 of the IT Act 1961, even in a case where an amount is credited on the very first day of the accounting year and the explanation offered by the assessee is not accepted, the amount may be assessed as income of the assessee during the accounting year for which the books of accounts are maintained. In view of the judgment of Calcutta High Court, in our opinion, the judgment of the Apex Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported as 220 Taxman 165(Mag) (Del), wherein it has been held that where notices to five out of nine share applicants returned unserved although other evidences were filed, the addition made u/s 68 is justified. Since the assessee's claim in terms of vital ingredients of section 68 i.e. the identity, creditworthiness and genuineness of transactions involved, has not been proved by the assessee, therefore, the AO's action, in making the addition is found justified and the same is therefore sustained and confirmed. Accordingly, the addition of Rs. 59,80,000/- as made by the AO u/s 68 of the Act is hereby confirmed. As a result, the Ground Nos. 2 & 3 of assessee are dismissed." 8. It is patent on record and not disputed that the assessee started its business operations from 28.02.2003. All the share application money, undisputedly, was received before this date. Question is whether it can be treated as unexplained. In 'CIT vs. Bharat Engineering Construction Company', 83 ITR 187 (SC) (supra) also, as in the present case, the amounts were received before the commencement of the business. The Hon'ble Supreme Court held that as such, they could not be added as the assessee's in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
