DCIT, Mohali V. M/s Beckons Inds. Pvt. Ltd., Mohali

ITA 221/CHANDI/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 8428 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 16-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S S KEMWAL
• Keywords: Unexplained cash credit; Search and seizure; Additional evidence
• Section: 143(3); 133(6); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 196/CHD/2009 ASSESSMENT YEAR: 2005-06 M/S BECKONS INDUSTRIES PVT. LTD., VS. THE ACIT, CHANDIGARH CIRCLE 5(1), CHANDIGARH PAN NO. AABCA2425K & ITA NO. 221/CHD/2009 ASSESSMENT YEAR: 2005-06 THE ACIT, VS. M/S BECKONS INDUSTRIES PVT. LTD., CIRCLE 5(1), CHANDIGARH CHANDIGARH PAN NO. AABCA2425K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY: SHRI S.S.KEMWAL ORDER PER SUSHMA CHOWLA, JM THE APPEAL OF THE ASSESSEE AND REVENUE ARE AGAINS T THE ORDER OF CIT(A), CHANDIGARH DATED 9.1.2009 RELATING TO ASSE SSMENT YEAR 2005-06 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF T HE I.T. ACT. 2. THE CROSS APPEALS OF THE ASSESSEE AND REVENUE W ERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORD ER FOR THE SAKE OF CONVENIENCE. 2 ITA NO. 196/CHD/2009 (ASSESSEES APPEAL) 3. THE ASSESSEE DURING THE COURSE OF HEARING HAD FU RNISHED CONCISE GROUNDS OF APPEAL AND THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- 2. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN ADDING BACK THE INCREASE IN SHARE CAPITAL OF RS. 9,33,500/- RECEIVE D FROM JODHPUR THROUGH VSM FINANCE & OTHERS AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INC OME TAX ACT WHICH IS ARBITRARY AND UNJUSTIFIED. 3. THE ASSESSEE COMPANY HAS FULLY DISCHARGED ITS DU TY AND RESPONSIBILITY BY FURNISHING TO THE LEARNED ASSESSI NG OFFICER THE NAMES AND ADDRESSES OF THE SHARE HOLDER S AVAILABLE AS PER STATUTORY PUBLIC ISSUE RECORDS. 4. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINS T THE ADDITION MADE ON ACCOUNT OF INCREASE IN SHARE CAPITAL OF RS. 9,33 ,500/- U/S 68 OF THE INCOME TAX ACT. 5. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD SHOWN INCREASE IN P AID UP SHARE CAPITAL TOTALING RS. 1,49,59,588/-. THE ASSESSEE HAD RECEI VED SHARE CALL MONEY OF RS. 9,33,500/- IN CASH FROM 249 PERSONS, WHO CONTR IBUTED RS. 3,750/- EACH.. THE ASSESSEE HAD FURTHER RECEIVED RS. 54 LA CS FROM M/S A.G.K. COMPUTER & ELECTRICALS, RS. 60 LACS FROM ONE ADDRES S I.E. M/S SUPREME COMMUNICATION AND RS. 26,00,080/- FROM VARIOUS PERS ONS WITH ONE ADDRESS I.E .AT 37, SHANKAR MARKET, CANNAUGHT PLACE , NEW DELHI, ALL IN CHEQUES. THE ASSESSING OFFICER DURING THE COURSE O F ASSESSMENT PROCEEDINGS, REQUISITIONED THE ASSESSEE TO FURNISH THE NAMES AND ADDRESSES OF THE PERSONS WHO HAD PAID THE SHARE APPLICATION M ONEY. THE ASSESSEE FURNISHED THE LIST OF PERSONS WITH NAMES AND ADDRES SES FROM WHOM THE SHARE APPLICATION MONEY WAS RECEIVED IN CASH. THE A SSESSING OFFICER 3 NOTED FROM THE PERUSAL OF THE DETAILS THAT MOSTLY T HE MONEY WAS RECEIVED FROM PERSONS BASED IN NEW DELHI AND JODHPUR AND FEW PERSONS OF MADRAS AND FARIDABAD. THE ASSESSING OFFICER CALLED FOR IN FORMATION FROM THE SAID 249 PERSONS U/S 133(6) OF THE ACT BUT MOST OF THE LETTERS WERE RECEIVED BACK OR SOME PERSONS WERE NOT FOUND AT THE GIVEN ADDRESSES. SOME PERSONS STATED NOT TO HAVE INVESTED IN THE SHA RE APPLICATION MONEY OF THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE B EFORE THE ASSESSING OFFICER WAS THAT NAME OF THE COMPANY HAD CHANGED FR OM M/S A.G.K. COMPUTER AND SECURE PRINTERS (P) LTD AND HENCE THE PERSONS MAY NOT BE AWARE OF THE NEW NAME OF THE COMPANY. TO INVESTIGAT E THE MATTER, THE ASSESSING OFFICER WROTE LETTERS TO THE INVESTIGATIO N UNIT OF JODHPUR, MUMBAI AND NEW DELHI TO EXAMINE THE GENUINENESS OF THE PERSONS OR BUSINESS ENTITIES FROM WHOM MONEY WAS RECEIVED BY THE ASSESSEE COMPANY. THE EXTRACTS OF THE LETTERS WRITTEN TO TH E INVESTIGATION WING AND THE REPLY OF THE ADIT (JODHPUR) ARE INCORPORATED AT PAGES 6 TO 9 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER ON ANALYSIS OF THE INFORMATION GATHERED, OBSERVED THAT THE PERSONS FROM WHOM SHARE APPLICATION MONEY WAS RECEIVED IN CASH WERE NOT RESIDING AT THE GIVEN ADDRESS FOR THE LAST SO MANY YEARS AND THE ADDRESSES GIVEN BY THE ASSESSEEE S WERE BOGUS. FURTHER, HE OBSERVED THAT THE ASSESSEE HAD FAILED T O PRODUCE ANY SHARE BROKERS FOR VERIFICATION THROUGH WHOM THE CASH WAS RECEIVED NOR A SINGLE PERSON WAS PRODUCED FOR VERIFICATION WHO COULD STAT E THAT SHARE CALL MONEY WAS PAID BY HIM TO THE ASSESSEE. EVEN LETTER S WRITTEN TO DIFFERENT PERSONS TO CLARIFY WHETHER THEY HAVE MADE ANY INVES TMENT OR PURCHASED SHARES OF A.G.K. COMPUTERS AND SECURE PRINTS (P) LT D, FALSIFY THE CLAIM OF THE ASSESSEE AS THE SAID PERSONS HAD STATED NOT TO HAVE INVESTED ANY MONEY IN THE SAID COMPANY. A REFERENCE WAS MADE TO THE L ETTERS OF SHRI JAGDISH GOYAL, BALLABHGARH, FRAIDABAD AND SHRI TIRLOK CHAND , BALLABHGARH 4 (FARIDABAD). THE ASSESSING OFFICER FURTHER RELIED UPON THE INQUIRY REPORT OF ADIT (INVESTMENT), JODHPUR WHEREIN HE HAD REPORT ED THAT NONE OF THE PERSONS WERE RESIDING AT THE GIVEN ADDRESS. THE AS SESSING OFFICER IN THE ABSENCE OF IDENTITY OF THE PERSONS BEING PROVED, TR EATED THE CASH RECEIPT OF RS. 9,33,500/- AS INCOME IN THE HANDS OF THE AS SESSEE. BEFORE THE CIT(A) THE LEARNED AR FOR THE ASSESSEE CLARIFIED TH AT SHARE HOLDER BASE OF THE ASSESSEE COMPANY WAS LARGE BEING A LISTED COMPA NY AND IT WAS NOT POSSIBLE AND ALSO NOT REQUIRED TO VERIFY, DETAILS O F INDIVIDUAL SHARE HOLDERS, HIS PAYING CAPACITY, ADDRESSES ETC. FURT HER AN APPLICATION WAS MOVED FOR THE ADMISSION OF ADDITIONAL EVIDENCE UNDE R RULE 46A OF THE I.T. RULES AS PROPER OPPORTUNITY WAS NOT AFFORDED B Y THE ASSESSING OFFICER. THE CIT(A) ALLOWED THE SAID OPPORTUNITY AN D THE MATTER WAS SENT BACK TO THE ASSESSING OFFICER FOR MAKING FURTHER EN QUIRIES. THE ASSESSEE MEANWHILE ALSO CLARIFIED THAT THE INITIAL SHARE APP LICATION MONEY WAS RECEIVED IN 1996 AND DURING THE YEAR UNDER CONSIDER ATION, ONLY SHARE CALL MONEY WAS RECEIVED. THE CIT(A) VIDE HIS OBSERVATI ON IN PARA 38 AT PAGE 18 OF THE APPELLATE ORDER OBSERVED AS UNDER : 38. AS REGARDS THE SHARE APPLICATION MONEY RECEIVE D IN CASH FROM249 PERSONS, THE ASSESSMENT PROCEEDINGS HA S GIVEN A FINDING THAT THESE PERSONS DO NOT EXITS. TH E ASSESSEE COULD NOT ESTABLISH ANY EVIDENCE ABOUT THE IDENTITY OF THESE PERSONS. THE CIRCUMSTANTIAL EVIDENCE IS AL SO AGAINST THE ASSESSEE AS THE MONEY HAS BEEN RECEIVED IN CASH ONLY FORM 3 STATIONS I.E. JODHPUR, NEW DELHI AND MU MBAI. IT IS HIGHLY IMPROBABLE THAT ALL PERSONS WOULD SUBS CRIBED IN CASH ONLY FROM THESE THREE STATIONS. THE ASSESSING OFFICER HAS GIVEN THE DETAILS ON PAGE 6 OF THIS ORDER WHERE IN ABOUT 189 PERSONS HAVE GIVEN NINE ADDRESSES. THE LETTERS ISSUED TO THESE PERSONS CAME BACK UNSERVED. THE ENQUIRIES WERE ALSO CONDUCTED THROUGH THE INVESTIGATION WING WHO G AVE ITS 5 REPORT WHICH HAS BEEN REPRODUCED BY THE ASSESSING O FFICER IN PAGE 7-8-9 OF THE ASSESSMENT ORDER. THE FINDING OF THE ASSESSING OFFICER HAS ALSO BEEN REPRODUCED IN PARA 10 OF THIS APPELLATE ORDER. THE ASSESSEE ALSO FAILED PRO DUCE THE ORIGINAL SHARE APPLICATION FORM FOR THE PURPOSES OF VERIFICATION TAKING THE PLEA THAT THESE SHARES HAVE BEEN DEMATERIALIZED AND THEY ARE NOT REQUIRED TO KEEP SU CH RECORDS. 6. THE CIT(A) THUS HELD THAT IN VIEW OF THE ENQUIRI ES AND INVESTIGATION MADE BY THE ASSESSING OFFICER AS DETAILED IN THE ASSESSMENT ORDER, THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE WA S NOT GENUINE. THE ADDITION MADE BY ASSESSING OFFICER WAS THUS UPHELD BY THE CIT(A). THE ASSESSEE IS AGGRIEVED BY THE SAID ORDER OF THE CIT( A) AND HENCE THE PRESENT APPEAL FILED BY THE ASSESSEE. 7. THE LEARNED AR FOR THE ASSESSEE POINTED OUT THAT BEFORE THE CIT(A) THE ADDITIONAL EVIDENCE BEING THE CONFIRMATION OF P ARTIES FROM WHOM CASH RECEIVED WAS FILED AND THE PAYMENT IN CASH WAS RECE IVED THROUGH (BROKER) M/S BSM FINANCE AND EXPORTS LTD. OUR ATTENTION WAS DRAWN TO THE LIST OF CALL MONEY RECEIVED IN CASH PLACED ON RECORD. THE LEARNED AR FAIRLY ADMITTED THAT CONFIRMATION OF SOME OF THE PARTIES W ERE FILED. OUR ATTENTION WAS DRAWN TO THE CONFIRMATION FILED BEFORE THE CIT( A) PLACED AT PAGE 51 OF THE PAPER BOOK ALONGWITH ACKNOWLEDGMENT OF FURNI SHING OF RETURN OF INCOME. THE ASSESSEE HAS PLACED ON RECORD THE CONF IRMATION OF DIFFERENT PARTIES FROM WHOM MONEY WAS RECEIVED IN CASH AT PAG ES 35 TO 49 WHICH WERE FILED ALONGWITH THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE, BEFORE CIT(A). THE LEARNED AR SUBMITTED THAT THE IDENTITY OF THE PERSONS WERE EXPLAINED AND THIS WAS CALL MONEY RECEIVED FRO M THE SAID PARTIES. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE C IT VS. G.P. 6 INTERNATIONAL LTD (2010) 33 DTR(P&H) 163 AND ACIT V S. VENKATESHWAR INSPAT P. LTD [319 ITR 393 (CHHATTISGARH)]. THE LE ARNED DR IN REPLY SUBMITTED THAT THE ASSESSING OFFICER HAD MADE ELABO RATE ENQUIRIES THROUGH INVESTIGATION UNIT AT JODHPUR, MUMBAI & DELHI WHICH ARE INCORPORATED AS PART OF THE ASSESSMENT ORDER. IN RESPECT OF THE CO NFIRMATION FILED BEFORE THE CIT(A), THE LEARNED DR POINTED OUT THAT MOSTLY SUCH CONFIRMATION WERE WITHOUT PAN NO. AND EVEN WITH PAN NO. , THE SA ME WERE NOT VERIFIABLE. THE LEARNED DR POINTED OUT THAT IN THE REMAND REPORT, THE ASSESSING OFFICER HAS NOT ADMITTED THE SAME AFTER L OOKING INTO THE RECORDS. THE PLEA OF THE LEARNED DR WAS THAT THE E VIDENCE FILED BY THE ASSESSEE WAS FABRICATED AND NON GENUINE AND EVEN TH E CONFIRMATION FILED WERE SELECTED. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE RECORDS. THE ASSESSEE IN THE PRESENT APPEAL HAS RAISED THE I SSUE WITH REGARD TO THE SHARE CALL MONEY RECEIVED DURING THE YEAR BY ASSESS EE COMPANY IN CASH. THE ASSESSEE HAD SHOWN INCREASE IN PAID UP SHARE CA PITAL OF RS. 1,49,59,588/-, OUT OF WHICH CASH OF RS. 9,33,500/- WAS RECEIVED FROM 249 PERSONS. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, INVESTIGATION WERE MADE BY THE ASSESSING OFFICER AND THE CONCLUSION WA S THAT THE SAID PERSONS DO NOT EXIST. FURTHER, BEFORE THE CIT(A), THE ASSESSEE MOVED AN APPLICATION OF ADMISSION OF ADDITIONAL EVIDENCE UND ER RULE 46A OF THE I.T. RULES CLAIMING THAT SUFFICIENT OPPORTUNITY WAS NOT ALLOWED BY ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HENCE THE CONFIRMATIONS COULD NOT BE FILED. THE ASSESSEE FURNISHED CONFIRMATIONS FROM SOME OF THE PARTIES FROM WHOM CASH OF RS. 3,7 50/- EACH WAS RECEIVED. THE ASSESSING OFFICER WAS CONFRONTED WITH THE SAID ADDITIONAL EVIDENCE. HOWEVER, NO ENQUIRIES WERE MADE BY THE ASSESSING OFFICER IN 7 RESPECT OF THE EVIDENCE FURNISHED BY THE ASSESSEE I N REMAND PROCEEDINGS. THE ASSESSING OFFICER FAILED TO MAKE ANY ENQUIRY IN RESPECT OF THE CONFIRMATIONS FILED BY THE ASSESSEE. THE CLAIM OF THE ASSESSEE WAS THAT IT WAS A PUBLIC LIMITED COMPANY AND DURING THE YEAR HA D RECEIVED CALL MONEY ONLY WHEREAS THE INITIAL SHARE CAPITAL WAS RECEIVED AND ACCEPTED DURING THE FINANCIAL YEAR 1996-97. 9. IN THE TOTALITY OF FACTS AND CIRCUMSTANCES OF T HE CASE WE FIND NO MERIT IN THE SAID ADDITIONS BEING MADE BY THE AUTHO RITIES BELOW. THE ASSESSEE DURING THE YEAR HAD RECEIVED PART OF SHARE CALL MONEY. INITIALLY SHARE CAPITAL WAS RECEIVED BY THE ASSESSEE WHEN THE PUBLIC ISSUE WAS MADE IN THE FINANCIAL YEAR 1996-97. THE SAID PERSONS A RE ON THE RECORD OF THE ASSESSEE FOR THE PAST MANY YEARS AND DURING THE YEA R UNDER CONSIDERATION ONLY PART OF THE SHARE CALL MONEY WAS CALLED FOR AN D RECEIVED IN CASH. THE ASSESSEE HAS FILED THE LIST OF PERSONS FROM WHOM T HE SHARE CALL MONEY WAS RECEIVED AND THE CONFIRMATIONS OF SOME OF THE PERSO NS WERE ALSO FILED. THE ASSESSEE HAD RECEIVED RS. 3,750/- EACH FROM 249 PERSONS. IN THE ABOVE SAID CIRCUMSTANCES, IT COULD NOT BE SAID THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE IDENTITY OF THE SAID PERSONS. WE F IND NO MERIT IN THE AFORESAID ADDITION OF RS. 9,33,500/- BEING CASH REC EIVED ON ACCOUNT OF SHARE CALL MONEY. WE SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 9,3 3,500/-. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS ALLOWED. ITA NO. 221/CHD/2009 (REVENUES APPEAL) 10. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE DELETION OF ADDITION MADE U/S 68 OF THE ACT AMOUNTING TO RS. 76 ,26,080/-. 8 11. THE ASSESSEE HAD RECEIVED THE SHARE CALL MONEY VIDE CHEQUES FROM THE SEVERAL PARTIES. THE ASSESSEE HAD SHOWN TO HAV E RECEIVED RS. 54 LACS AS SHARE CALL MONEY FROM M/S A.G.K. COMPUTER AND SE CURE PRINTERS (P) LTD, WHICH WAS ACCEPTED BY ASSESSING OFFICER AND N O ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE. HOWEVER, THE ASSESS ING OFFICER FOUND THAT THE ASSESSEE TO HAVE RECEIVED MONEY FROM 08 PERSONS HAVING THE SAME ADDRESSES AT MUMBAI TOTALING RS. 50 LACS AND FROM 0 9 PERSONS AT DELHI HAVING SAME ADDRESSES, TOTALING RS. 26,26,080/-. T HE ASSESSING OFFICER WAS OF THE VIEW THAT MONEY HAD BEEN INTRODUCED IN T HE BOOKS OF ACCOUNT OF THE ASSESSEE COMPANY IN THE GARB OF SHARE CALL M ONEY AND THE SAME WAS ADDED AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. THE CIT(A) HELD THAT THE RATIO LAID DOWN BY THE HON'BL E SUPREME COURT IN M/S LOVELY EXPORTS PVT LTD 216 CTR 195 (SC) WAS APP LICABLE IN RESPECT OF SHARE CALL MONEY RECEIVED BY THE ASSESSEE. THE C IT(A) FURTHER ANALYZED THE DETAILS IN CONNECTION WITH THE CALL MONEY RECEI VED FROM 08 PERSONS FROM DELHI TOTALING RS. 26,26,080/- AND FOUND THAT THE SAID SHARES WERE CREDITED TO THE DMAT ACCOUNT OF VARIOUS PARTIES, WH ICH IN TURN PROVED THAT THE SAID PERSONS WERE EXISTING PERSONS HAVING RUNNI NG ACCOUNT. THE PRELIMINARY DOCUMENTS I.E. ACCOUNT OPENING FORMS, F ORMS OF DMAT ACCOUNT WERE ALSO PERUSED BY THE CIT(A) AND IT WAS OBSERVED BY THE CIT(A) THAT NO EVIDENCE WAS PLACED ON RECORD THAT THESE DMAT AC COUNTS WERE IN FACT OPERATED BY THE ASSESSEE COMPANY AND THESE PERSONS WERE NON EXISTENT. SIMILAR EXERCISE WAS CARRIED OUT BY THE CIT(A) IN R ESPECT OF THE SHARE APPLICATION MONEY RECEIVED FROM PERSONS BASED AT MU MBAI TOTALING RS. 50 LACS. THE CIT(A) ON VERIFICATION OF THE EVIDENCE OB SERVED THAT THE SAID PERSONS WERE CONNECTED TO M/S SUPREME COMMUNICATION AND THE ASSESSEE HAD RECEIVED THE PAYMENT FROM THE SAID PERSONS BY C HEQUES. THE EXISTENCE OF THE SAID PERSONS WAS ESTABLISHED AND T HE INTIMATION WAS 9 FORWARDED TO THE ASSESSING OFFICER IN CHARGE OF M/S SUPREME COMMUNICATION TO MAKE NECESSARY VERIFICATION. THE CIT(A) APPLYING THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN LOV ELY EXPORTS (SUPRA) HELD THAT THE ASSESSEE COMPANY TO HAVE DISCHARGED T HE ONUS IN RESPECT OF SHARE APPLICATION MONEY TOTALING RS. 76,26,080/-. THE REVENUE IS IN APPEAL AGAINST THE SAID ORDER OF THE CIT(A). 12. WE FIND IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD FURNISHED EVIDENCE TO ESTABLISH THE IDENTITY OF THE PERSONS W HO HAD CONTRIBUTED SHARE APPLICATION MONEY TOTALING RS. 76,26,080/-. T HE IDENTITY OF THE PERSONS WAS FURTHER INVESTIGATED BY INVESTIGATION W ING AND IT WAS ALSO FOUND THAT THE SHARES IN QUESTION WERE CREDITED TO THE DMAT ACCOUNT OF THE RESPECTIVE PARTIES. ONCE THE ASSESSEE HAD DISCHARG ED ITS PRIMARY ONUS OF DISCLOSING THE IDENTITY OF THE PERSONS IN RESPECT O F SHARE CALL MONEY RECEIVED DURING THE YEAR, WE FIND NO MERIT IN TREAT ING THE SAME AS UNEXPLAINED U/S 68 OF THE ACT, IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN M/S LOVELY EXPORTS (SUPRA) . AS PER THE HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD.(SUPRA), WHERE THE NAMES OF THE SHARE APPLICANTS ARE GIVEN T O THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO RE-OPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW BUT SUCH AMOUNTS COULD NOT BE ADDED IN THE HANDS OF THE ASSESSEE COMPANY. PERTINENTLY , IT MAY BE MENTIONED HERE THAT THE HON'BLE SUPREME COURT HAD HELD THAT E VEN IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSIN G OFFICER, EVEN THEN NO ADDITION IS PERMISSIBLE IN THE HANDS OF THE ASSE SSEE COMPANY BUT, THE DEPARTMENT WAS FREE TO REOPEN THE INDIVIDUAL ASSESS MENTS OF THE SHARE HOLDERS. IN THE FACTS OF THE PRESENT CASE THE ASSE SSEE HAD ESTABLISHED THE 10 IDENTITY OF THE SHARE APPLICANTS AND FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN M/S LOVELY EXPORTS (SUPRA) , WE ARE IN CONFORMITY WITH THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS. 76,26,080/-. HOWEVER, THE ASSESSING OFFICER IS AT LIBERTY TO TAKE ACTION AGAINST INDIVIDUAL SHARE HOLDERS IN ACCORDANCE WITH LAW. WE UPHOLD THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS. 76, 26,080/- AND DISMISS THE GROUND OF APPEAL RAISED BY THE REVENUE. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF OCTOBER, 2010. SD/- SD/- (G.S.PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 TH OCTOBER, 2010 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR