ITO vs. Superline Construction P. Ltd (ITAT Mumbai)

DATE: November 30, 2015 (Date of pronouncement)
DATE: December 3, 2015 (Date of publication)
AY: 2007-08
FILE: Click here to download the file in pdf format
S. 68 (bogus share capital): Despite statement of Mukesh C. Choksi & Jayesh Sampat admitting bogus share capital, addition cannot be made in assessee-company's hands

(i) The Assessing Officer failed to appreciate that there is no documentary evidence against the assessee-company to support such impugned additions. The Assessing Officer failed to appreciate that as against the statements of any person recorded u/s 143(3) r.w.s. 147, the assessee-company has fully discharged the burden of proof, onus of proof and explained the source of share capital and advances received by established the identity, creditworthiness and genuineness of transaction by banking instruments with documentary evidences. The further stand of the assessee has been that the assessee substantiated the details with the documentary evidences as extracted from the website of Ministry of Corporate Affairs, Government of India before the Assessing Officer. These facts have not been rebutted on behalf of the Revenue.

(ii) If the share application money is received by the assessee company from alleged bogus share holders who’s name are given to the AO then the department is free to proceed to reopen their individual assessments in accordance with law but it cannot be regarded as undisclosed income of assessee company.

(CIT vs. M/s. Lovely Exports (Pvt) Ltd, reported in [2008] 216 CTR 195 (SC), ITO (10(2)(3) vs. J.J. Multitrade Pvt Ltd, in ITA No. 2158/Mum/2014 : AY 2007-08, J-Bench & ITA No.2159/Mum/2014 : AY 2008-09, J-Bench ITAT E Bench in M/s. SDB Estate Pvt Ltd vs. ITO-(5)(3)(2) in ITA No. 584/Mum/2015: AY 2008-09 ITO – 10(2)(1) vs. M/s. Deep Darshan Properties Pvt Ltd in ITA No. 2117/Mum/2014 : AY 2006-07 and ITA No.2118/Mum/2014 : AY 2007-08, ITO –10(2)(3) vs. Aajivan Computers Pvt Ltd in ITA No.2160/Mum/2014 :AY 2006-07, ITO –10(2)(3) vs. Dignity Securities Trading Pvt Ltd in ITA No.2157/Mum/2014 :AY 2006-07, ITO –10(2)(1) vs. M/s. Blue Hill Properties Pvt Ltd in ITA No.2119/Mum/2014: AY 2006-07 referred)

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