ITO, New Delhi V. M/s. Novel Deal Capital Management Services Ltd., New Delhi

ITA 917/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3731 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 06-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 05-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KISHORE
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 143(3); 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH F DELHI ] BEFORE SHRI RAJPAL YADAV, JM AND SHRI K. D. RAN JAN, AM I. T. APPEAL NOS. 916 & 917 (DEL) OF 2010 ASSESSMENT YEARS : 2003-04 & 2004-05. THE INCOME-TAX OFFICER, M/S. NOV EL DEAL CAPITAL AND W A R D : 13 (3), VS. MANAGEMENT SERVICES LTD., N E W D E L H I. E78, LIC COLO NY, PASCHIM VIHAR, N E W D E L H I. P A N / G I R NO. AAACN 4118R. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI R. S. SINGHVI, C. A.; DEPARTMENT BY : SHRI B. KISHORE, SR. D. R.; O R D E R. PER K. D. RANJAN, AM : BOTH THESE APPEALS BY THE REVENUE FOR ASSESSMENT Y EARS 2003-04 AND 2004-05 ARISE OUT OF SEPARATE ORDERS OF THE LD. CIT (APPEALS)XVI , NEW DELHI. THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF, FOR THE SAKE OF CONVENIE NCE, BY THIS CONSOLIDATED ORDER. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN B OTH THE ASSESSMENT YEARS [EXCEPT FOR THE AMOUNTS] ARE IDENTICAL AND READ AS FOLLOWS :- ASSESSMENT YEAR 2003-04 1. THAT ON THE FACTS AND THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT (APPEALS) ERRED IN DELETING THE ADDITION OF RS.15,01,115/- MADE ON ACCOUNT OF SHARE APPLICATION MONEY UNDER SECTION 68 OF THE INCOME TAX ACT, 1961; 2 I. T. APPEAL NOS. 916 & 917 (DEL) OF 2010 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. LD. CIT (APPEALS) ERRED IN DELETING THE ADDITION OF RS.37,528/- MADE ON ACCOUNT OF COMMISSION UNDER SECTION 68 OF INCOME TAX ACT, 1961 HOLDING THAT SINCE THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDI T UNDER SECTION 68 HAS BEEN DELETED, THERE REMAINS NO JUSTIFICATION FOR SUSTAIN ING THIS ADDITION; 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT (APPEALS) ERRED IN IGNORING THE FACT THAT THE J UDGEMENT OF THE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (P) LTD. 216 CTR 199 (SC) CANNOT BE EXTENDED TO A SITUATION WHERE A MECHANISM HAS BEEN FORMED TO INTR ODUCED UNACCOUNTED MONEY IN THE BOOKS OF ACCOUNTS WITH THE HELP OF ACCOMMODA TION ENTRY PROVIDERS, WHICH HAS BEEN EXPOSED BY DEEP AND DETAILED INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING OF THE DEPARTMENT; 4. THAT THE CIT (APPEALS) HAS ERRED IN AP PLYING THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (P) LTD. 216 CTR 199 (SC) WHICH IS NOT APPLICABLE WHERE THE SHARE APPLICATION IS NOT RECEIVED IN A PUBLIC ISSUE. ASSESSMENT YEAR 2004-05 1. THAT ON THE FACTS AND THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT (APPEALS) ERRED IN DELETING THE ADDITION OF RS.RS.1 6,01,660/- MADE ON ACCOUNT OF SHARE APPLICATION MONEY UNDER SECTION 68 OF THE INC OME TAX ACT, 1961; 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. LD. CIT (APPEALS) ERRED IN DELETING THE ADDITION OF RS.40,042/-, MADE ON ACCOUNT OF COMMISSION UNDER SECTION 68 OF INCOME TAX ACT, 1 961 HOLDING THAT SINCE THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDI T UNDER SECTION 68 HAS BEEN DELETED, THERE REMAINS NO JUSTIFICATION FOR SUSTAIN ING THIS ADDITION; 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT (APPEALS) ERRED IN IGNORING THE FACT THAT THE J UDGEMENT OF THE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (P) LTD. 216 CTR 199 (SC) CANNOT BE EXTENDED TO A 3 I. T. APPEAL NOS. 916 & 917 (DEL) OF 2010 SITUATION WHERE A MECHANISM HAS BEEN FORMED TO INTR ODUCED UNACCOUNTED MONEY IN THE BOOKS OF ACCOUNTS WITH THE HELP OF ACCOMMODA TION ENTRY PROVIDERS, WHICH HAS BEEN EXPOSED BY DEEP AND DETAILED INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING OF THE DEPARTMENT; 4. THAT THE CIT (APPEALS) HAS ERRED IN AP PLYING THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (P) LTD. 216 CTR 199 (SC) WHICH IS NOT APPLICABLE WHERE THE SHARE APPLICATION IS NOT RECEIVED IN A PUBLIC ISSUE; 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (APPEALS) ERRED IN DELETING THE ADDITION ON ACCOUNT OF CONTRIBUTION IN AOP OF RS.40,00,000/-. 3. THE FIRST COMMON ISSUE FOR OUR CONSIDERATION IN BOTH THE APPEALS RELATES TO DELETING THE ADDITION OF RS.15,01,115/- IN ASSESSMENT YEAR 2003- 04 AND RS.16,01,660/- IN ASSESSMENT YEAR 2004-05 MADE ON ACCOUNT OF SHARE APPLICATION MONEY UNDER SECTION 68 OF THE ACT. IN THESE APPEALS RETURNS OF INCOME FILED BY THE ASSESSEE FOR BOTH THE YEARS WERE PROCESSED UNDER SECTION 143(1). THEREAFTER THE AO INITIATED PROCEEDINGS UN DER SECTION 147 FOR BOTH THE YEARS ON RECEIPT OF INFORMATION FROM INVESTIGATION WING OF THE DEPAR TMENT THAT THE ASSESSEE HAD TAKEN ACCOMMODATION ENTRIES IN THE GARB OF SHARE APPLICAT ION MONEY IN ASSESSMENT YEAR 2003-04 FROM ARUN FINVEST P. LTD. [RS.5,00,000/-]; TECHNOCOM ASS OCIATED P. LTD. [RS.6,00,615/-]; AND BIC CONSULTANTS P. LTD. [RS.4,00,500/-]. IN ASSESSMENT YEAR 2004-05 THE ASSESSEE RECEIVED SHARE APPLICATION MONEY FROM KOVACO SALES P. LTD. RS.4,00 ,415/-]; RAHUL FINLAYS P. LTD. [RS.4,00,415/-]; SHRI DINANATH LOHARIWALA SP [RS.4, 00,500/-]; AND TRANSPAN FINANCIAL SERVICES [RS.4,00,415/-]. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN O RDER TO ASCERTAIN GENUINENESS AND CREDITWORTHINESS OF THE COMPANIES WHO HAVE APPLIED FOR ALLOTMENT OF SHARES, SUMMONS WERE ISSUED, WHICH WERE RECEIVED BACK WITH THE POSTAL RE MARKS NO SUCH FIRM. THE AO DEPUTED 4 I. T. APPEAL NOS. 916 & 917 (DEL) OF 2010 INSPECTOR OF INCOME-TAX FOR VERIFICATION OF THE EXI STENCE, GENUINENESS, CREDITWORTHINESS OF THE PARTIES. THE INSPECTOR OF INCOME-TAX REPORTED THAT NO SUCH COMPANY WAS IN EXISTENCE AT THE ADDRESS AVAILABLE WITH THE DEPARTMENT. FURTHER THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE ON 23 RD OCTOBER, 2007 FOR BOTH THE YEARS AND ASKED IT TO P RODUCE THE PRINCIPAL OFFICERS OF THE SAID COMPANIES FROM WHOM SHARE APPL ICATION MONEYS WAS RECEIVED. THE ASSESSEE COMPANY FAILED TO PRODUCE THE DIRECTORS OF THE SAID COMPANIES. THE AO, THEREFORE, IN THE ABSENCE OF ANY VERIFICATION OF THE INFORMATION TREA TED THE TRANSACTION AS NON-GENUINE AND MADE THE ADDITIONS IN THE HANDS OF THE ASSESSEE FOR BOTH THE YEARS UNDER SECTION 68 OF THE ACT. THE AO ALSO ADDED AN AMOUNT OF RS.37,528/- AS COMMISSION W HICH MIGHT HAVE BEEN PAID BY THE ASSESSEE TO THE ENTRY OPERATORS AND IN ASSESSMENT YEAR 2004- 05 AN AMOUNT OF RS.40,042/- WAS ADDED ON ACCOUNT OF THE COMMISSION. 5. BEFORE THE LD. CIT (APPEALS) IT WAS SUBMITTED BY THE ASSESSEE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED ALL RELEV ANT PARTICULARS / DOCUMENTARY EVIDENCE OF THE TRANSACTIONS WITH THE THREE PARTIES IN ASSESSMENT Y EAR 2003-04 AND FOUR PARTIES IN ASSESSMENT YEAR 2004-05. THESE DOCUMENTS INCLUDED SHARE APPLICATIO N FORMS, BOARD RESOLUTION, CONFIRMATION FROM SHARE APPLICANTS, AFFIDAVITS FROM SHARE SUBSCR IBERS, BANK STATEMENT OF ASSESSEE COMPANY, CERTIFICATE OF INCORPORATION UNDER COMPANIES ACT, M ASTER DETAILS AS PER WEBSITE OF REGISTRAR OF COMPANIES AND COPY OF INCOME-TAX RETURN FILED BY TH E SHARE SUBSCRIBERS. THE SHARE APPLICANTS HAVE INVESTED THEIR MONEY THROUGH ACCOUNT-PAYEE CHE QUES. THE AO HAD ADDED THE AMOUNT UNDER SECTION 68 AS UNEXPLAINED CREDIT BUT WITHOUT BASING HIS FINDINGS ON ANY VERIFICATION / OR INCRIMINATING MATERIAL. IT WAS ALSO STATED THAT TH E AO HAD FAILED TO PROVIDE ANY OPPORTUNITY TO CROSS EXAMINE THE PERSON WHO HAD GIVEN THE STATEMEN T TO THE INVESTIGATION WING OF THE DEPARTMENT REGARDING ASSESSEE HAVING TAKEN ACCOMMOD ATION ENTRIES IN VIEW OF WHICH ADDITIONS MADE BY THE AO WERE TOTALLY UNCALLED FOR AND DEVOID OF ANY MERIT. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF LOVELY EXPORTS 216 CTR 295 (SC). THE LD. CIT (A) CONSIDERED THE SUBMISSIONS OF THE A SSESSEE. HE FURTHER SUBMITTED THAT ALL THE PARTIES HAVE BEEN ALLOTTED PAN BY THE DEPARTMENT AN D WERE FILING INCOME-TAX RETURNS. THE ASSESSEE HAD FILED VARIOUS DOCUMENTS BEFORE THE AO WHICH SUPPORTED THE IDENTITY OF THE INVESTORS/SHARE APPLICANTS AND ALSO PROVED THAT SHA RE APPLICATION TRANSACTIONS ENTERED BY IT WITH 5 I. T. APPEAL NOS. 916 & 917 (DEL) OF 2010 THE SAID INVESTORS WERE GENUINE TRANSACTIONS. IN VI EW OF THESE FACTS THE LD. CIT(A) NOTED THAT THE AO HAD SIMPLY RELIED UPON INFORMATION PROVIDED BY I NVESTIGATION WING OF THE DEPARTMENT AND NO CONCRETE EFFORTS WERE MADE TO VERIFY THE FACTS S TATED THEREIN. THE ASSESSEE HAD FILED COPIES OF SHARE APPLICATION FORMS WHICH CONTAINED NAMES, ADDR ESSES, PAN, BANK DETAILS, CONFIRMATION OF INVESTORS, COPY OF ANNUAL RETURNS AND RETURNS OF AL LOTMENT FILED WITH REGISTRAR OF COMPANIES ETC. HE PLACED RELIANCE ON THE DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF LOVELY EXPORTS (SUPRA) WHEREIN IT HAS BEEN HELD THAT NO ADDITION O N ACCOUNT OF SHARE APPLICATION MONEY CAN BE MADE IN THE HANDS OF THE ASSESSEE. THE AO HAD NOT AFFECTED ANY ENQUIRIES TO BRING OUT ANY FACTS WHICH COULD SUGGEST THAT THOSE PARTIES HAVE GIVEN A CCOMMODATION ENTRIES TO THE ASSESSEE AND THAT MONEY RECEIVED FROM THOSE PARTIES WAS ASSESSEES OW N UNDISCLOSED INCOME AND ROUTED BACK TO THE ASSESSEE IN THE GUISE OF SHARE APPLICATION. TH E LD. CIT (A) ALSO RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIVINE LEAS ING & CO. LTD. AND ALSO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. M/S . PONDY MILLS DATED 19/02/2007. SINCE THE ASSESSEE HAD FILED COPY OF PAN NUMBERS, THE INITIAL ONUS CAST UPON THE ASSESSEE TO DISCHARGE OBLIGATION OF ESTABLISHING THE IDENTITY OF THE SUB SCRIBERS AND BONAFIDE OF THE TRANSACTIONS HAVE BEEN DISCHARGED. THE AO, THEREFORE, COULD NOT MAKE ADDITION MERELY RELYING ON THE REPORT OF THE INVESTIGATION WING. THE LD. CIT (A) ACCORDINGLY DE LETED THE ADDITION. 6. BEFORE US, THE LD. SR. DR SUBMITTED THAT THE AO HAD ISSUED SUMMONS TO THE ASSESSEE WHICH HAVE BEEN RETURNED BACK UNSERVED. THE INSPEC TOR OF INCOME-TAX ALSO REPORTED THAT SHARE APPLICANTS WERE NOT AVAILABLE AT THE ADDRESSES GIVE N BY THE ASSESSEE. THE ASSESSEE HAD NOT PRODUCED THE SHARE APPLICANTS. THEREFORE, IDENTITY OF THE SHARE APPLICANTS HAVE NOT BEEN ESTABLISHED. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD DISCHARGED INITIAL ONUS FOR PROVING THE IDENTITY OF SHARE APPLICANTS BY FILING PAN NUMBERS, COPY OF BANK ACCOUNT, RETURNS OF INCOME, SHARE ALLOTMENT RETURNS SUBMITTED TO THE REGISTRAR OF COMPANIES. THEREFORE THE ASSESSEE HAD DISCHARGED T HE ONUS. THE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE IN VIEW OF THE DECISION OF HO NBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (SUPRA). 6 I. T. APPEAL NOS. 916 & 917 (DEL) OF 2010 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE ABOVE FACTS IT IS EVIDENT THAT THE ASSESSEE HAD GIVEN DETAILS OF PAN, BANK STATEMENT, COPIES OF RETURNS ETC IN SUPPORT OF ITS CONTENTION THAT SHARE APPLICATION MONEY RECEIVED WAS GENUINE. THE DEPARTMENT HAS ISSUED PANS TO ALL THE SHARE APPLICA NTS. THE THUS THE IDENTITY OF THE SHARE HOLDERS HAVE BEEN ESTABLISHED. THE AO HAD MERELY R ELIED ON THE REPORT OF THE INVESTIGATION WING THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION E NTRIES. HE HAD NOT CONDUCTED ANY ENQUIRY TO PROVE THAT THE MONEY INTRODUCED IN THE FORM OF S HARE APPLICATION MONEY HAS ACTUALLY FLOWN FROM THE COFFERS OF THE ASSESSEE. THEREFORE, IN VI EW OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. LOVELY EXPORTS P. LTD. (SUPRA) ADDI TION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE COMPANY. THE AO WAS FREE TO MAKE ADDITION IN THE HANDS OF THE SHARE APPLICANTS. THEREFORE, IN OUR CONSIDERED OPINION, THE LD. CIT ( A) WAS JUSTIFIED IN DELETING THE ADDITION AND ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE LD. CIT (A). 8. THE NEXT COMMON ISSUE FOR OUR CONSIDERATION RELA TES TO PAYMENT OF COMMISSION ALLEGED TO HAVE BEEN MADE TO SHARE APPLICANTS. SINCE WE HA VE CONFIRMED THE DELETION OF SHARE APPLICATION MONEY, THE ADDITION OF COMMISSION BEING CONSEQUENTIAL TO THE SHARE APPLICATION MONEY HAS TO BE DELETED. ACCORDINGLY, THE LD. CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION ON ACCOUNT OF COMMISSION FOR OBTAINING THE ACCOMMODATI ON ENTRIES. 9. THE LAST ISSUE FOR CONSIDERATION IN ASSESSMENT Y EAR 2004-05 RELATES TO DELETING THE ADDITION ON ACCOUNT OF CONTRIBUTION IN AOP OF RS.40 ,00,000/- ON PROTECTIVE BASIS. THE AO WHILE COMPLETING ASSESSMENT NOTED THAT AS PER INFORMATIO N RECEIVED FROM THE ITO [OSD] CIT-IX WITH REGARD TO ORDER PASSED UNDER SECTION 143(3) OF THE ACT IN THE CASE OF RAMPAL & PARTY (AOP) FOR ASSESSMENT YEAR 2004-05 THAT M/S. NOVEL DEAL CAPITA L & MANAGEMENT SERVICES LTD., A MEMBER OF ABOVE AOP HAS CONTRIBUTED IN THE SAID AOP AN AMO UNT OF RS.40,00,000/- AND ADDED THE INCOME IN THE HANDS OF AOP ON SUBSTANTIVE BASIS. T HE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THE RS.40,00,000/-. THE ASSESSEE FILED ACCOUN T STATEMENT OF M/S. SUBEY SINGH AND STATED THAT THE COMPANY HAD INVESTED THE SAID AMOUNT AS CAPITAL OF THE FIRM. THIS MONEY WAS REFUNDED TO THE COMPANY ON 27 TH JUNE, 2003, WHICH WAS FURTHER INVESTED INTO CAPITA L OF M/S. RAMPAL & PARTY. 7 I. T. APPEAL NOS. 916 & 917 (DEL) OF 2010 THE AO OF WARD 25(1), NEW DELHI, HAD WRONGLY ADDED THE CAPITAL OF NOVEL DEAL IN THE HANDS OF M/S. RAMPAL & PARTY ON WRONG PRESUMPTION. THE AO, HOWEVER, WAS OF THE VIEW THAT SOURCE OF THE DEPOSIT IN M/S. RAMPAL & PARTY HAD NOT BEEN EXP LAINED. HE ADDED THE AMOUNT IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. 10. BEFORE THE LD. CIT (APPEALS) IT WAS SUBMITTED T HAT THE ASSESSEE COMPANY WAS PARTNER IN THREE AOP FIRMS, M/S. BRIJ LAL, M/S. SUBEY SINGH & CO. AND M/S. RAMPAL & PARTY. THE ASSESSEE HAD SHOWN INVESTMENT IN THESE AOP FIRMS UNDER SCHED ULE III [ACCOUNT HEAD INVESTMERNT] OF THE BALANCE SHEET. THE ASSESSEE INFORMED THE AO TH AT FUNDS WERE INVESTED IN AOP M/S. RAMPAL & PARTY AS CAPITAL CONTRIBUTION AFTER SHOWING WITHD RAWAL FROM M/S. SUBEY SINGH & CO. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FILED A C HART INDICATING THE SOURCES OF THE FUNDS AS PER WHICH ASSESSEE INVESTED RS.40,00,000/- THROUGH NORM AL BANKING CHANNELS IN AOP FIRM, M/S. BRIJ LAL FROM THE BANK ACCOUNT MAINTAINED BY IT WITH BAN K OF HYDERABAD ON 1/04/2003. M/S. BRIJLAL IN TURN INVESTED THE SAME AMOUNT WITH M/S. SUBEY SI NGH & CO. AND M/S. SUBEY SINGH & CO. MADE DD IN FAVOUR OF ETC, RAJASTHAN ON BEHALF OF M/ S. RAMPAL & PARTY. ALL THESE AOPS WERE ASSESSED TO TAX AND HAVE PAN ALLOTTED TO THEM. IT WAS ALSO SUBMITTED THAT IN CASE OF RAMPAL & PARTY THE ASSESSING OFFICER HAD ADDED AMOUNT OF RS. 40,00,000/- ON SUBSTANTIVE BASIS. THE AO, THEREFORE, WAS NOT JUSTIFIED IN MAKING THE ADDITION ON PROTECTIVE BASIS IN THE CASE OF ASSESSEE. THE LD. CIT (A), HOWEVER, NOTED THAT AFTER LOOKING INTO THE EVIDENCES FILED IN THE SHAPE OF ACKNOWLEDGEMENTS OF HAVING FILED THE RETURNS OF INC OME BY M/S. BRIJ LAL, M/S. SUBEY SINGH & CO. AND M/S. RAMPAL & PARTY, BALANCE SHEET / PROFIT AND LOSS ACCOUNT / COMPUTATION OF INCOME, THERE WAS NO JUSTIFICATION IN MAKING THE ADDITION O F RS.40,00,000- IN THE HANDS OF THE ASSESSEE. THE ASSESSEE HAS MAINTAINED BANK ACCOUNT WITH STATE BANK OF HYDERABAD, KAROL BAGH FROM WHICH IT COULD BE SEEN THAT THE ASSESSEE COMPANY RE CEIVED SHARE APPLICATION MONEY ON DIFFERENT DATES OUT OF WHICH AN AMOUNT OF RS.40,00,000/- WAS PAID TO M/S. BRIJ LAL & CO. [AOP SINCE THE LD. CIT (A) DELETED THE ADDITION ON ACCOUNT OF SHAR E APPLICATION MONEY, HE DIRECTED THE AO TO DELETE THE ADDITION. 8 I. T. APPEAL NOS. 916 & 917 (DEL) OF 2010 11. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE ABOVE FACTS IT IS CLEAR THAT SOURCE OF RS.40,00 ,000/- IS FROM SHARE CAPITAL RECEIVED FROM VARIOUS PARTIES. THE ASSESSEE HAD INVESTED RS.40,0 0,000/- IN M/S. RAMPAL & PARTY THROUGH M/S. BRIJ LAL [AOP] AND M/S. SUBEY SINGH & CO. AND ETC, RAJASTHAN. SINCE THE AMOUNT HAS BEEN ROUTED THROUGH BANKING CHANNELS AND HAD BEEN PAID O UT OF SHARE APPLICATION MONEY SO COLLECTED, THE SOURCE OF DEPOSIT OF RS.40,00,000/- STANDS PROV ED AND HENCE NO PROTECTIVE ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE. THEREFORE, THE LD. CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION. 12. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 10 TH JUNE, 2011. SD/- SD/- [ RAJPAL YADAV ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10 TH JUNE, 2011. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT. 9 I. T. APPEAL NOS. 916 & 917 (DEL) OF 2010