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  In Re Hiten Ramanlal Mahimtura (ITAT Mumbai)

ITO, Ward 1(2) New Delhi vs. M/s Accord Metal India P.Ltd. WZ-1661, Nangal Raya New Delhi 110 046
September, 18th 2012
                  DELHI BENCHES: "A" NEW DELHI

                   BEFORE SHRI AD JAIN, JM AND

                   SHRI J.SUDHAKAR REDDY, A.M.

                             ITA No:4424/Del/2010
                        Assessment Year : - 2007-08

ITO, Ward 1(2)    vs.     M/s Accord Metal India P.Ltd.
New Delhi                 WZ-1661, Nangal Raya
                          New Delhi 110 046

                          PAN: : AAECA 2141 D


                          C.O. No. 193/Delhi/2011
                         (In ITA no.4424/Del/2010)
                          Assessment Year: 2007-08

M/s Accord Metal (I) P.Ltd.     vs.   ITO, Ward 1(2)
New Delhi                             New Delhi

(Appellant)                                     (Respondent)

                 Appellant by : Shri Pirthilal, Sr.D.R.
      Respondent by : Shri K.C.Singhal, Adv. & Charitra Gupta, C.A.



      This is an appeal filed by the Revenue directed against the order of

the Ld.CIT(A) dt.17.8.2010 pertaining to the Assessment Year 2007-08.

The Cross Objection is filed by the assessee.

2.    The sole issue in dispute is an addition made under Section 68 of

the Income Tax Act, 1961 of the share application money received by the

assessee from six companies. The list is as follows.

Sl.   Name                     Address                 No. of     Amount
No.                                                    shares     (Rs.)
1.    Adequate Transport &     311, D-5, Avadh         1,00,000   10,00,000
      Tours Ltd.               Complex, Delhi
2.    CJ Exim P.Ltd.           C-74, Kirti nagar       3,00,000   30,00,000
3.    Lifeline HF              311, D5, Avadh          1,20,000   12,00,000
      Development Co.Ltd.      Complex Delhi
4.    Standard Air Travel      E-10, B Jawahar         1,20,000   12,00,000
      Services P.Ltd.          park, Laxmi nagar,
                               Delhi 92
5.    Grain Tech Engineers     4/9, Bhola Nath                    10,00,000
      P.Ltd. (share            nagar, Shahdara,
      application money)       Delhi
6.    Anni Shoes P.Ltd.        H 23, Double                       10,00,000
      (Share application       storey, Lajpat
      money)                   nagar, New Delhi

3.    We have heard Mr.Pirthilal, Ld.Sr.D.R. on behalf of the Revenue

and Mr KC Singhal, Advocate on behalf of the assessee.

4.    On a careful consideration of the facts and circumstances of the

case, on perusal of the relevant material on record and various case laws

cited, we hold as follows.:-

5.    Both the parties have relied upon a number of case laws in their

support. Before we dwelve into the issue as to which case law applies, to

the facts, we consider the type of evidences that have been produced by

the assessee. These are as follows:-

i. Copies of Certificate of Incorporation of share applicant companies;
ii. Copies of share application forms from all parties;
iii. Copies of respective Board resolutions for subscribing to shares of
assessee company;
iv. Complete details of share applicant companies available with ROC;
v. Copies of returns in form no.2 filed with ROC informing the allotment
of shares to share applicant companies;
vi. Confirmation of account from all parties;
vii. Independent confirmations from parties;
viii. Affidavits of the Directors of all parties;
ix. Copy of ITR along with PAN of all parties relating to Assessment Year
x. Latest copies of ItRs i.e. Assessment Year 2009-10 of share applicants
showing same address;
xi. Copy of Balance sheet of all parties as on 31.3.2007;
xii. copy of bank account of the assessee evidencing the payments by
xiii. copies of bank account of share applicants as supporting evidence of
payment from their respective bank accounts to the account of the
assessee company;
Letter dt. 25.6.2010 to the ITO requesting to make enquiry regarding
share applicants through their respective ITOs;
Copies of letters directly written by the share applicants to the ITO
confirming their addresses.

6.    On perusal of these evidences, we conclude that the First Appellate

Authority was right in holding that the Assessing Officer was wrong in

ignoring the evidences filed by the assessee such as copy of income tax

returns containing PAN numbers, ROC Certificates, Bank Statements

etc. as these prove the identity of the investing companies. He was right

in holding that once the identity of the investing company stands proved,

then no addition can be made under Section 68 of the Income Tax Act,

1961 in view of the judgement of Hon'ble Supreme Court in the case of

CIT vs. Lovely Exports P.Ltd. 216 CTR (SC) 195. The argument of the

Ld.D.R. that this judgement of Hon'ble Supreme Court is not binding as

it is a dismissal of an SLP, is against the proposition laid down by the

Jurisdictional High Court in the case of CIT vs. Dwarkadhish Investment

P.Ltd. 330 ITR 298 (Delhi). As we have applied the ratio laid down by the

Apex Court, to the facts of the case, we do not deal with the numerous

Tribunal decisions and High Court decisions sought to be relied upon by

the Ld.D.R.

7.    In view of the quality of evidence submitted by the assessee, in

support of the genuineness of share application money of the assessee,

and in view of the fact that the Assessing Officer does not have any

material or evidence to disprove the claims made by the assessee, we

dismiss this appeal filed by the Revenue.

8.    Coming to the Cross Objection the same is       dismissed as `not


9.    In the result the appeal of the Revenue and the Cross Objection by

the assessee are dismissed.

Order pronounced in the Open Court on 17th September,2012.

                   Sd/-                             Sd/-
            (A.D. JAIN)                     (J.SUDHAKAR REDDY)
         JUDICIAL MEMBER                    ACCOUNTANT MEMBER

Dated: the 17th September, 2012


Copy of the Order forwarded to:

   1. Appellant; 2.Respondent; 3.CIT; 4.CIT(A); 5.DR; 6.Guard File

                                                  By Order

                                                  Dy. Registrar

  1.   Date of Dictation:
  2.   Draft placed before the Author on:
  3.   Draft proposed and placed before Second Member on:
  4.   Draft discussed/approved by the Second Member on:
  5.   Approved draft came to Sr.P.S. on:
  6.   Date of Pronouncement :
  7.   File sent to Bench Clerk on :
  8.   Date on which file given to Head Clerk on:
  9.   Date of dispatching the Order on:
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