M/S GOLI FINANCE LTD.,NEW DELHI vs. DCIT, NEW DELHI

1. On the facts and in the circumstances of the case and in law, the Learned CIT(Appeals) has passed the order arbitrarily and without least verification and appreciating of facts.

Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon.

In support of the ground, the Learned AR submitted that the assessee company is duly registered with Reserve Bank of India as a non-banking financial company and is authorized to accept cash from public at large. The transaction in question is pure and simple case of receipt of share application money during the normal course of business. There is no material on record 3 even to assume that any dubious method are applied for injecting unaccounted money in the form of the share capital in the company. It is not the case of the authorities below that assessee has received bogus accommodation entries in the garb of share application money. The Learned AR submitted that the assessee had received an amount of Rs.30,03,500 from the share applicants towards share application money out of which an amount of Rs.8,27,500 was received in cash and rest of the amount of Rs.21,76,000 was received via banking channel. Out of the amount of Rs.21,76,000, the Assessing Officer doubted the credit of Rs.7,84,000 and added the same under sec. 68 on the ground that before the issuance of cheque from these accounts, cash was deposited in these accounts. The Learned AR submitted that against the receipt of share application money in cash, the assessee had filed affidavits and fan of the parties, details of which have been made available at page No. 57 of the paper book. All the persons who had applied in cash had confirmed in their affidavits that they had received the money back from the assessee upon cancellation of their applications for allotment of shares. The money received was thus refunded to them in the next financial year and the date of refunding of money has been mentioned at page No. 57 of the paper book. He pointed out that the case of the assessee was selected for scrutiny on 16.11.2007 and the assessee 4 had refunded the entire share application money before this date. He submitted that though the assessee had refunded the money in next financial year yet the money was refunded before the commencement of assessment proceedings of the impugned year. He submitted that the Assessing Officer had not brought any material on record to establish that the documentary evidences submitted by the assessee vis-à-vis refund of share application money are false. The Assessing Officer very conveniently ignored the affidavits of the parties and also their statements while making the addition even in the next assessment year no adverse inference vis-à-vis repayment of the money to the share applicants has been made by the Assessing Officer.

Having gone through the orders of the authorities below, material available on record and the decisions relied upon, we are of the view that primary onus always lie upon the assessee to establish genuineness of its claim. IT can be discharged by furnishing necessary information supported with evidence about the claim i.e. share applicants in the present case. In the 7 present case, the assessee had furnished details of the share applicants supported with some evidence. These are two categories of the share applicants in the present case. The first category was of those share applicants who had paid share application money in cash and the second category of the share applicants was those paid share applicant money through cheque. In the first category of share application, the assessee had furnished their details and confirmations by their affidavit and in case of some parties their PANs were also furnished. Besides, it was also explained that they had received their money back from the assessee upon cancelation of their application for allotment of shares. This refund of money to them was made in the next financial year and the same has been accepted by the Assessing Officer in the assessment of the next year. It is also an important aspect of this category of share applicants that during the course of assessment proceedings, they had appeared before the Assessing Officer and had confirmed of paying and receiving back their respective share application money from the assessee. We are thus of the view that the assessee had discharged its primary onus to establish genuineness of this category of the share applicants. Thereafter, the onus was shifted upon the Assessing Officer to dislodge the claim of the assessee by disproving those evidences and submissions made by the assessee discussed above. In 8 absence of conducting such exercise by the Assessing Officer, the Assessing Officer was not justified in making the addition of Rs.8,27,500 received in cash. The Assessing Officer is thus directed to delete this addition made under sec. 68 of the Act.