COMMISSIONER OF INCOME TAX vs. SIRI RAM SYAL HYDRO POWER PVT. LTD.

Whether the Reporters of local papers may be allowed to see the judgment? No.

To be referred to the Reporter or not? No.

Whether the judgment should be reported in the Digest? No.

However, upon a perusal of the file, we find that the said addition was deleted by the Commissioner of Income Tax (Appeals) [for short “CIT(A)] and the Tribunal on the ground that identity of share applicant was not in doubt and he was an income tax assessee holding a valid Permanent Account number (PAN) . In fact, the CIT(A) in its order has observed as under:- “2.5 I have carefully considered the submissions made on behalf of appellant. It is true that in appeal proceedings, the appellant’s AR himself attended and volunteered for producing Sh. Sujit Acharya before the AO for examination which shows genuine intention of the appellant. On this specific request the remand order was passed. However the witness could be produced in the remand proceedings. The AR has explained the reasons for appellant’s inability to produce him. However from the documents placed before the AO and in appeal it is found that the identity of the share applicant is not in doubt. Copy of his PAN card, for No. 32 his consent letter to be a director of the company and bank account (although of subsequent period) do prove the existence and identity of the party. He is a director of the company. The PAN number has also been checked on the computer system of department and it shows the juri iction of Sh. Sujit Acharya with ITO ward 23(4) New Delhi. It is also seen that the signature of Sh. Sujit Acharya on various documents do tally with each other. Same signatures appear on the confirmation letter in which he has confirmed having paid Rs.50 lacs to the appellant company. It is not in dispute that the payment has been made as share application money in lieu of which two share certificate allotting total 50,000 shares of Rs.100 each were issued to him on 1/2/07. The ratio of Supreme Court decision in the case of Lovely Exports is very clear and has been reconsidered or reviewed. In fact the ratio has been followed in many cases by other judicial authorities. Since in this case the identity of the person and genuineness of transaction is proved, in my opinion the addition of share application money in the case of appellant company is not justified. If the AO has any doubt about the source of payment, he may send the information to the AO having 2010:DHC:4355-DB

The Tribunal in its impugned order has also observed as under :- “6. In the present case, it is not in dispute that the assessee has received share application money from its Director Shri Sujit Acharya, who has filed confirmation letter before the AO. The existence of Shri Sujit Acharya was not in dispute inasmuch as his identity and existence is established by fact that he was having Permanent Account Number as well as he is maintaining bank account with Axis Bank, a copy of which was filed before the AO. His existence is also established from the fact that in Form No.22, filed with the