M/S BLOOMS REALATORS & HOSPITALITY PVT. LTD.,LUCKNOW vs. INCOME TAX OFFICER-1(4), LUCKNOW
Income Tax Appellate Tribunal, LUCKNOW ‘B’ BENCH, LUCKNOW
Before: SH. KUL BHARAT & SH. NIKHIL CHOUDHARYA.Y. 2010-11
PER NIKHIL CHOUDHARY, A.M.:
This is an appeal filed by the assessee against the orders of the ld. CIT(A)-
Lucknow dated 30.03.2015, wherein the ld. CIT(A) has dismissed the appeal of the assessee against the orders of the Assessing Officer under section 143(3) for the A.Y. 2010-11 passed on 30.03.2013. The grounds of appeal are as under: -
“1. Because the findings recorded by the learned Commissioner of Income Tax
(Appeals) that the asasesse has failed to discharge the onus to establish the identity, credit worthiness of share holder company and genuineness of the transaction are wholly perverse finding.
Because the assessee during the assessment proceeding as well as before the Commissioner of Income Tax (Appeals) has filed the documents share application form, certificate of incorporation, acknowledgement of ITR, bank statements and copies of PAN Card of share holders company. These documents are sufficient to establish the identity, credit worthiness and genuineness of the transaction.
Because it is well settled law that a person, making investment in share capital is best judge regarding his investment. The 9 share holder companies on their own have made investment in the appellant company. The wrong decision of the investor cannot be a basis for making addition u/s 68 of the Income Tax Act. M/s Blooms Realators & Hospitality Pvt. Ltd.
A.Y. 2010-11
Because the Apex Court had repeatedly held that if the share application money is received by a company from alleged bogus share holders whose names are available with the assessing officer and Income tax department then the department has to proceed against the share holders in accordance with law and this amount cannot be added under section 68 of the Income Tax Act.
Because the company was incorporated in 2008. The share application money was received by the company in 2009-2010. The said share application money was received by 9 share holder companies. This amount cannot be clubbed in the hand of the assessee company. If the department is of the view that the said amount was channelized by someone, it is open for the department to add the said amount as income in the hand of the person who has channelized the amount and in no case the said amount be added in the hand of the assessee company under section 68 of the Income Tax Act.
Because the Assessing Officer as well as the Appellate Authority has relied upon on the alleged spot enquiry conducted by Inspector of Income Tax but the said enquiry report has not at all been provided to the assessee thus the said enquiry report cannot be a basis for making addition in the hand of assessee.
Because all the 9 share holder companies are incorporated under the provisions of Companies Act, 1956. There records are available with the