MAKEWAY CONSULTANCY PVT. LTD.,BHUBANESWAR vs. DCIT, CIRCLE-1(1), BHUBANESWAR

This is an appeal filed by the assessee against the order of CIT(A)-

1, Bhubaneswar, dated 8.11.2016 for the assessment year 2010-2011.

the addition of Rs.44,00,000/- under section 68 of the Act.

consideration, the assessee received share application money of

Rs.44,00,000/- in cash from the following persons:

“Maeway Consultancy Private Limited

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Details of Share Capital Introduced during Financial Year 2009-10 AMOUNT NAME OF THE ADDRESS OF THE SHARE MODE OF OF SHARE SL SHARE DATE HOLDER PAYMENT INDTROD HOLDER U CED During 3/O-KHITINDRA KUMAR MOHANTY 750,000.0 F.Y- 1 MANDAN MOHANTY PLOT No. 899, JHARAPADA, Cash 0 2009- NEAR BDA COLONY,BHUBANESWAR 10 During W/O-NANDAN MOHANTY 325,000.0 F.Y- 2 3ONALIRAJ MOHANTY PLOT No. 899, JHARAPADA, Cash 0 2009- NEAR BDA COLONY, BHUBANESWAR 10 CHANDRAMANI MOHAPATRA During ALEKHA KU. AT - TENTULISIAN F/Y 3 35,000.00 Cash MOHAPATRA PO/VIA - KAMAKHYANAGAR 2009- DIST - DHENKANAL 10 During LATE - PRAVAKAR PRADHAN F/Y 4 ASHOK PRADHAN 35,000.00 Cash AT - SASANGA /VIA - CHARBATIA 2009- PO - KUMARPUR, DIST - CUTTACK 10 LATE -JACOB DAS During 5 ATUL KU DAS AT - MANDAPADA 35,000.00 F/Y Cash PO - DOULATABAD, DIST - CUTTACK 2009- PURNA CHANDRA BEHERA During 6 AVIRAM BEHERA AT/PO - RADHAKISHOR PUR 35,000.00 F/Y Cash VIA - ATHAGARH, DIST - CUTTACK 2009- LATE - NALU BEHERA During 7 BABAJI BEHERA(A) AT - IMMAMNAGAR, PO - BHAIRPUR, 35,000.00 F/Y Cash PS - JAGATPUR, DIST - CUTTACK 2009- HATAKESHAR BEHERA During 8 BABAJI BEHERA(B) AT/PO - RADHAKISHOR PUR 35,000.00 F/Y Cash VIA - ATHAGARH, DIST - CUTTACK 2009- BHIMSEN DAS During 9 BALARAM DAS 35,000.00 Cash AT - NUAPATNA, PO - KAY ALP ADA F/Y VIA - CHASAPADA, DIST - CUTTACK 2009- BANAMALI SAHOO During 10 BANSIDHAR SAHOO 35,000.00 Cash AT - HURISAHI, PO - MAHAL F/Y VIA - DANPUR, DIST - KENDRAPADA 2009- During BIMBADHAR PRADHAN F/Y 11 BASANT PRADHAN 35,000.00 Cash AT/PO-TALABASTA, 2009- VIA - DAMP ADA, DIST - CUTTACK 10 JAIRAM MOHARANA During 12 BASANTA KU. AT - KUMBHEI,PO -SALAGAON F/Y 35,000.00 Cash MOHARANA VIA - JAGATPUR,PS - JAGATPUR 2009- DIST - CUTTACK 10 ISWAR CHANDRA PAL During 13 BHAJAY KUMAR PAL AT - DEKANI, PO- PATALIPANKA 35,000.00 F/Y Cash VIA - KUJANGA, DIST - 2009- KENDRAPADA 10 BAISHNAB BEHERA During 14 BIBHUTI BEHERA 35,000.00 Cash AT/PO - RADHAKISHOR PUR F/Y VIA - ATHAGARH, DIST - CUTTACK 2009- BAURIBANDHU SWAIN During 15 BICHITRANANDA AT - ANDEISAHI, PO - BHOIRIPUR F/Y 35,000.00 Cash SWAIN PS- JAGATPUR, DIST - CUTTACK 2009- 10

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AMOUNT NAME OF THE SHARE MODE OF OF SHARE SL ADDRESS OF THE SHARE HOLDER DATE HOLDER PAYMENT INDTRODU During uATE - GOPAL BISWAL F/Y 16 3IDYADHAR BISWAL 35,000.00 Cash AT/PO - BALI,VIA - ATHAGARH 2009- DIST - CUTTACK 10 LATE - KALI CHARAN MOHANTY During F/Y AT - MAHULIAGARH (BASUDEVPUR) 17 BIJAY MOHANTY 35,000.00 Cash 2009- PO - KADUA /VIA - 10 ' JAGANNATHPRASAD DIST - GANJAM SAMSEN BIHARI During 18 BIRANJAN BIHARI 35,000.00 Cash AT - PARBATIA, PO - CHHAGAON F/Y VIA - CHARBATIA, DIST - CUTTACK 2009- During LATE - GOPI GHADEI F/Y 19 DAMODAR GHADEI 35,000.00 Cash AT - KAPURSINGH, PO - ORANDA 2009- VIA - ATHAGARH, DIST - CUTTACK 10 BRAJABANDHU SAHOO During 20 DHIRENDRA KU. AT - BHOIRIPUR, PO - SALAGAON 35,000.00 F/Y Cash SAHOO VIA - JAGATPUR, DIST CUTTACK 2009- During DAMBARUDHAR SAMAL F/Y 21 DILLIP KU.SAMAL 35,000.00 Cash AT - KAPURSINGH, PO - ORANDA 2009- VIA - ATHAGARH, DIST - CUTTACK 10 DAMADOR SAHOO During 22 GANDHARBA SAHOO 35,000.00 Cash AT/PO - BALI, VIA - ATHAGARH, F/Y PS- GURUDIJHATIA, DIST - CUTTACK 2009- BALI BALMUKHI During F/Y 23 GANGARAM BALMUKHI AT - MASUDIA, PO - 35,000.00 Cash 2009- RADHAKISHORPUR VIA - ATHAGARH, 10 DIST- CUTTACK During JOGENDRA SETHA F/Y AT - PURUSOTTAMPUR 24 GOURANGA SETHA 35,000.00 Cash 2009- PO - RADHAKISHORPUR 10 VIA - ATHAGARH, DIST- CUTTACK During RAM CHANDRA OJHA F/Y 25 HRUSIKESA OJA 35,000.00 Cash AT/PO - PURUNA BAZAR, 2009- DIST - BHADRAK 10 During LATE - SHYAMSUNDAR NAYAK F/Y 26 KAILASH CH. NAYAK 35,000.00 Cash AT/PO - RADHAKISHOR PUR 2009- VIA - ATHAGARH, DIST - CUTTACK 10 During LATE - RAMA CHANDRA KODAM F/Y SINGH AT - BEHENDA, PO - 27 KARTIK KODAM SINGH 35,000.00 Cash 2009- GADAMATIAPUR, VIA - KANAS, DIST 10 - PURI KAILASH SETHI During 28 KESAB SETHI AT/PO - RADHAKISHOR PUR 35,000.00 F/Y Cash VIA - ATHAGARH, DIST - CUTTACK 2009- HARIHARA BEURA During 29 LAXMIDHAR BEURA AT - DIHASAHI, PO -KAYLA PADA 35,000.00 F/Y Cash VIA - CHHASAPADA, DIST - CUTTACK 2009- During LATE - SAURI BISWAL F/Y AT - GANESHSWAR PUR, 30 LAXMIDHAR BISWAL 35,000.00 Cash 2009- PO - GOPINATHPUR, 10 VIA - BAHUGRAM, DIST - CUTTACK

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FAKIR CH. MOHANTY During AT/PO - TARADINGI, F/Y 31 LAXMIDHAR MOHANTY 35,000.00 Cash VIA - ATHAGARH, DIST- CUTTACK 2009- 10 AMOUNT SL NAME OF THE SHARE MODE OF ADDRESS OF THE SHARE HOLDER OF SHARE DATE HOLDER PAYMENT INDTRODU i 3AIDHAR ROUT During 32 35,000.00 Dash MAHESWAR ROUT AT - BISHNUPUR, PO - KAKHADI, F/Y VIA - CHHASAPADA, DIST - CUTTACK 2009- RUPEI HEMBRUM During 33 MOHAN HEMBRUM AT - LAXMIPRIYA PUR, PO- SAHIDA, 35,000.00 F/Y Cash VIA - PALLAHADA, DIST.- ANGUL 2009- IATIA GAGARAI During 34 MRS JASMA GAGARAI 35,000.00 Cash AT - BRAHMANBASTA, PO - F/Y KAKHADI, 2009- LATE - MADHAB BEURA During 35 PARSURAM BEURA 35,000.00 F/Y Cash AT - KAPURSINGH, PO - ORANDA, 2009- VIA - ATHAGARH, DIST - CUTTACK 10 During DAITARI BEHERA F/Y 36 PITAMBAR BEHERA 35,000.00 Cash AT/PO - HARIPUR, PS - KHAIRA, 2009- DIST - BALESHWAR 10 MADHAV BEHERA During PRAMOD KUMAR 37 35,000.00 F/Y Cash AT- BELDA, PO - RADHAKISHORPUR, BEHERA 2009- ATHAGARH, CUTTACK. 10 NIRANJAN DASH During AT - KEDARESWAR, PO - F/Y 38 PRAMOD KUMAR DASH 35,000.00 Cash CHARBATIA, 2009- VIA - CHOUDWAR, DIST - CUTTACK 10 LATE - JADUMANI SWAIN During 3 9 PRASANTA SWAIN 35,000.00 Cash AT/PO - RADHAKISHOR PUR F/Y VIA - ATHAGARH, DIST - CUTTACK 2009- JAYADEV SAHOO During 4 0 PRATAP KU. SAHOO 35,000.00 Cash AT - SARKOLI, PO - BALI, F/Y PS - GURUDIJHATIA, DIST - 2009- RATNAKAR BISWAL During 4 1 RADHANATH BISWAL 35,000.00 Cash AT/PO - BALI,VIA - ATHAGARH, F/Y PS - GURUDIJHATIA, DIST - 2009- GHANASYAM BEHERA During 4 2 RAJ KISHORE BEHERA AT - SITARAMPUR, PO - ORANDA, 35,000.00 F/Y Cash VIA - ATHAGARH, DIST - CUTTACK 2009- GOLEKHA BIHARI SAMAL During 4 3 RAJAT KUMAR SAMAL AT/PO - ORANDA, VIA - ATHAGARH 35,000.00 F/Y Cash PS - GURUDIJHATIA, DIST - 2009- LATE - RAJU MUDULI During 4 RAMA CHANDRA F/Y 35,000.00 Cash AT/PO - BHATAPARA, VIA- 4 MUDULI 2009- BAHUGRAM, PS - SALIPUR, DIST - 10 HURIMAJHI During 4 5 SANKARMAJHI AT/PO - RADHAKISHOR PUR 35,000.00 F/Y Cash VIA - ATHAGARH, DIST - CUTTACK 2009- GOURANGA SAHOO During AT - GADASAHI, PO - ATHAGARH, F/Y 46 SANTOSH KU. SAHOO 35,000.00 Cash VLA/PS - ATHAGARH, 2009- DIST - CUTTACK 10

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During PAHALI DAS F/Y 47 SARAT CH. DAS 35,000.00 Cash AT - BISHNUPUR, PO - KAKHADI, 2009- VIA - CHHASADA, DIST - CUTTACK 10 ARJUN SAHOO During AT - PURUSOTTAM PUR, F/Y 48 SEKHAR SAHOO 35,000.00 Cash PO - RADHAKISHORPUR, 2009- VIA - ATHAGARH, DIST CUTTACK 10

AMOUNT NAME OF THE SHARE OF SHARE MODE OF SL ADDRESS OF THE SHARE HOLDER DATE HOLDER INDTRODU PAYMENT CED i LATE - KHALI CH. MOHANTY \T- During F/Y BASUDEVPUR, PO - KADUA , 49 35,000.00 Cash 3HYAM SUNDAR 2009- VIA - JAGANNATHPRASAD, MOHANTY 10 DIST - GANJAM • DAITARI BEHERA During 50 35,000.00 Cash SUBASH BEHERA AT/PO - RADHAKISHORPUR, F/Y VIA - ATHAGARH, DIST CUTTACK 2009- DUSASHAN SAHOO During 51 SUDARSAN SAHOO 35,000.00 Cash AT - BRAHMANBASTA, PO - F/Y KAKHADI, 2009- LATE -UCHHAB SAHOO During 52 SUDHAKAR SAHOO 35,000.00 Cash AT/PO - BALI, VIA - ATHAGARH, F/Y PS - GURUDIJHATIA, DIST - 2009- LATE - KHETRABASI PARIDA During 53 SUKANTA KU. PARIDA 35,000.00 Cash AT/PO - RADHAKISHORPUR, F/Y VIA - ATHAGARH, DIST CUTTACK 2009- SATYANANDA SETHI During 54 SURESH SETHI AT/PO - RADHAKISHORPUR, 35,000.00 F/Y Cash VIA - ATHAGARH, DIST CUTTACK 2009- KARUNAKAR MALLA During 55 TAP AN KU. MALLA AT/PO- SIKHARPUR, 35,000.00 F/Y Cash PS - CHAULIAGANJA, DIST - 2009- During HADIBANDHU SAMAL F/Y 56 YUDHISTIR SAMAL 35,000.00 Cash AT - KAPURSINGH, PO - ORANDA, 2009- VIA - ATHAGARH, DIST - CUTTACK 10 During BRUNDABAN SARGHARIA ANT ARY AMI 57 35,000.00 Cash F/Y AT-TADAKI, PO. CHANDRAPUR, VIA- SARGHARIA 2009- DUKURA, DIST-MAYURBHANJ SANKARSAN DAS During F/Y 58 ARUNDAS PLOT NO.3657, PRACH VIHAR, 35,000.00 Cash 2009- PALASUNI, BHUBANESWAR-25, 10 BHUBAN NAG During F/Y 59 BANSIDHARA NAG AT-SURESHMAL, PO. DUNGUIGUDA, 35,000.00 Cash 2009- VIA-CHAHARBAL, KALAHANDI, 10 ANAM CHARAN SWAIN During 60 BASANTA SWAIN 35,000.00 Cash AT-OSANGARA, PO-JIGARANA, F/Y VIA-JARIA, DIST-KENRAPADA, 2009- During KISHORE CHANDRA SAHOO 61 BIBEKANANDA SAHOO 35,000.00 Cash F/Y PLOT NO.245, JAYDEV VIHAR, 2009- BHUBANESWAR-13, ODISHA

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BANAMBAR SAMAL During 62 HEMANTA KU SAMAL 35,000.00 F/Y Cash AT/PO. ALATI BHARATAPUR, VIA- 2009- THAKURPATNA, DIST. JAIPUR SIBA BISOI During F/Y 63 JANAKI BISOI 35,000.00 Cash TARINI BARTI, NEAR SATYA NAGAR 2009- OVER BRIDGE, BHUBANESWAR, 10 PABITRA MOHAN SAHOO During 64 MAD AN MOHAN SAHOO 35,000.00 Cash AT/PO-SANKHAMUR F/Y PS-KHAMAR, ANGUL, ODISHA 2009- GOPINATH SAHOO During AT-CHATILO, PO-HARIANTA, VIA- F/Y 65 MOHAN SAHOO 35,000.00 Cash CHOUDWAR, DIST-CUTTACK, 2009- 10 ODISHA

AMOUNT NAME OF THE SHARE OF SHARE MODE OF SL ADDRESS OF THE SHARE HOLDER DATE HOLDER INDTRODU PAYMENT CED 3ATYABRATA MOHAPATRA During 66 4rs. KUMUDINI SAHOO VT-NIALISAHI, PO. NIALI, 35,000.00 '/Y Cash T ] DIST-CUTTACK, ODISHA ’009-10 3HYAMSUNDAR PANIGRAHI VT- During F/Y 67 MURALIDHAR PANIGRAHI 'KHAIRAJALA,PO- ALASU, VIA- 35,000.00 Cash 2009- JAGANNATHPRASAD, GANJAM 10 APRATI SAMAL During 68 'IRUSINGHA CH. SAMAL 35,000.00 F/Y Cash AT/PO-PIRBAZAR, JAGATPUR, 2009- CUTTACK, ODISHA 10 LALMOHAN PANDA During F/Y 69 PRAMOD KUMAR PANDA AT- SUNARIBUGUDA, PO - 35,000.00 Cash 2009- MADHUPALLI VIA - PALSURA, DIST- 10 KHETRABASI JENA During 70 PRAVAT KUMAR JENA 35,000.00 F/Y Cash AT/PO. BAGADA, VIA- 2009- SRIBALADEVJEW, DIST- 10 MANAS KUMAR PRUSTY During AT-NAYAPALLI, NUASAHI, F/Y 71 RINIMAHAPATRA 35,000.00 Cash PLOT NO.495, BHUBANESWAR, 2009- ODISHA 10 During RAM CHANDRA SWAIN F/Y AT/PO. SAILO JHARPADA, 72 SANDHYARANI SWAIN 35,000.00 Cash 2009- VIA-SAILO GOBINDPUR, 10 DIST-CUTTACK, ODISHA During SATYANARAYAN SATPATHY 73 SOURAV SATPATHY 35,000.00 F/Y Cash AT/PO. KHANDAPADA, MADHUBAN 2009- SAHI, DIST-NAYAGARH 10 HARA NARAYAN PATNAIK AT/PO- During 74 SUJATA PATNAIK 35,000.00 Cash F/Y HAZIPUR, VIA-TIRAN, DIST- 2009- JAGATSIGHPUR, ODISHA LATE - BABAJI BEHERA During 75 ASHOK KU. BEHERA AT/PO - GURUDIJHATIA, 35,000.00 F/Y Cash PS - GURUDIJHATIA, DIST- CUTTACK 2009- KRUSHNA CHANDRA ROUT During 76 ASHOK KUMAR ROUT AT - BALICHATURI, 35,000.00 F/Y Cash PO - CHASAPADA. DIST - CUTTACK 2009-

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RAJ AN PARIDA During KANAKATURU, F/Y 77 BASUDEV P ARID A 35,000.00 Cash PO - SANKURU, VIA/PS - BUGUDA, 2009- DIST - GANJAM 10 During GHANASHYAM PRADHAN 78 BHIKARIPRADHAN F/Y AT - ANGASINGHA, PO - SARANKUL, 35,000.00 Cash (DRVR) 2009- DIST-NAYAGARH 10 BIPRABAR SAMAL During F/Y AT/PO - BEDAPADA, VIA- HINDOL 79 BHIMSEN SAMAL 35,000.00 Cash 2009- ROAD, PS - RASOL , DIST - 10 DHENKANAL SURENDRA KU. SAMAL During C/O - P. SAHOO F/Y 80 BIBHUDATTA SAMAL 35,000.00 Cash QR NO - L/327, BARAMUNDA, 2009- H.B COLONY, BHUBANESWAR- 751 10 During LAMBODAR JENA F/Y AT/PO - CHHAGAON, VIA - 81 BI J AY JENA "B" 35,000.00 Cash 2009- ATHAGARH, PS - GURUDIJHATIA, 10 DIST - CUTTACK AMOUNT MODE NAME OF THE SHARE OF SHARE OF SL ADDRESS OF THE SHARE HOLDER DATE HOLDER INDTRODU PAYMEN T CED LATE - KULAMANI SAMAL During 82 DHIRENDRA KISHORE 35,000.00 Cash AT/PO - SATYABHAMAPUR, F/Y SAMA VIA - BAHUGRAM, DIST - CUTTACK 2009- LATE - BAISHNAB CHARAN SAHOO During 83 GOBARDHAN SAHOO AT - PARIPADA, PO - PARIPADA 35,000.00 F/Y Cash VIA - MANGALPUR, DIST - JAIPUR. 2009- GOPI PRADHAN During 84 HARIHARA PRADHAN 35,000.00 F/Y Cash AT/PO- TARATUA, DIST- KHORDHA, 2009- ODISHA During LATE - ANATABANDHU MOHANTY F/Y AT/PO - TAMANDO, KHANDAGIRI, 85 KAMAL MOHANTY 35,000.00 Cash 2009- KHURDA. 10 LATE- BASUDEV DAS During 86 KEDARESWAR DAS 35,000.00 Cash AT - NUAPATNA, PO - KAY ALP AD A, F/Y VIA - CHHASAPADA, DIST - 2009- RAM CHANDRA MUDULI During AT/PO- BHATAPARA, VIA- F/Y 87 MANOJ KU. MUDULI 35,000.00 Cash BAHUGRAM, 2009- PS - SALIPUR, DIST - CUTTACK. 10 GHANASHYAM ROUT During 88 NARENDRA ROUT(B) 35,000.00 Cash AT - PITHAKHIA, PO - F/Y GURUDIJHATIA, 2009- LATE - BANCHHANIDHI JENA During AT/PO - RADHAKISHORPUR, F/Y 89 NIRMALKU. JENA 35,000.00 Cash PS - KHUNTUNI, 2009- VIA - ATHAGARH, DIST CUTTACK 10 During LATE - MAHESWAR NAYAK F/Y 90 NRUSINGHA CH. NAYAK 35,000.00 Cash AT - KUNDI, PO - KUMUDA JAIPUR, 2009- DIST - CUTTACK. 10 LATE - PIT ABASH SWAIN During 91 PRABIR KUMAR SWAIN 35,000.00 Cash AT/PO - SISILO, VIA - BALAKATI, F/Y PS - DIST - KHURDA- 752100 2009-

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LATE - MINAKETAN PATTNAIK During 92 PRADEEP KU. AT - ORAMI, PO - HADAPADA, 35,000.00 F/Y Cash PATTNAYAK(I VIA - NARANGADA, DIST- KHURDA 2009- DHIRENDRA KISHORE SAMAL During 93 PRADEEP SAMAL AT/PO - SATYABHAMAPUR, 35,000.00 F/Y Cash VIA - BAHUGRAM, DIST - CUTTACK 2009- PACHANAN ROUT During 94 PRASANTA KU. ROUT AT - BALI SASAN, PO - BALI, 35,000.00 F/Y Cash VAI - ATHAGARH, DIST - CUTTACK. 2009- PRAVAKAR BEHERA During 95 PRASNTA KU BEHERA 35,000.00 F/Y Cash AT -DADHISINGA, PO - 2009- MAHIMAGADI, DIST - DHENKANAL LATE - RAMRUP SINGH During 96 RAMA KISHORE SINGH 35,000.00 Cash AT - DHARMAPIPARA, PO- KOKILA, F/Y VIA /PS - JAGDISHPUR, BIHAR. 2009- During BARID BARAN BARAL F/Y 97 SATYAJEET SINGH 35,000.00 Cash AT - BIRAKISHOR PUR, 2009- PO - ATHAGARH, DIST - CUTTACK. 10 44,00,000/ -

During the course of assessment proceedings, the Assessing Officer

required the assessee to produce the following 10 persons alongwith

their proof of identity, their genuineness, creditworthiness and their

sources:

Sl. No. Name of the person and address 01. Nandan Mohanty, Jharapada ,BDA Colony,Bhubaneswar. 02. Sonaliraj Mohanty,Jharapada ,BDA Colony, Bhubaneswar. 03. Basanta Swain,Osangara, Jigarana, Kendrapara. 04. Banambar SamaLAlati Bharatpur. 05' Muralidhar Panigrahi, Khairajala.PO-Alasu. 06. Pramod Kumar Panda, Sunaribuguda,Madhupali. 07. BibhudattaSamai.Baramunda.H.B.Colony, Bhubaneswar. 03.. 08. Manoj Kumar Muduli. Bnatapara.Salipur. 09. Prabir Kumar Swaina ,Ssilo,Balakati. 10. Bichitrananda Swain,Andeisahi.Jagatpur.Cuttack.

of share application money, documentary evidence and confirmation of

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each party from whom such share application money amounting to

Rs.44,00,000/- was obtained. Ld A.R. of the assessee appeared and filed

copy of income tax returns of Shri Nandan Mohanty and Sanoliraj

Mohanty for assessment year 2010-2011 from whom share application

money of Rs.7,50,000/- and Rs.3,25,000/- was received in cash and

submitted that they were also the directors of the company. The

Assessing Officer observed that almost all the transactions except two are

in a round figure of Rs.35,000/- each, and has been received in cash

during financial year 2009-2010. Therefore, he added the same u/s.68 of

the Act as unexplained income and thereby made addition of

Rs.44,00,000/-.

whom share application money was received by the assessee during the

impugned assessment year. He submitted that out of 97 persons, two

persons namely Shri Nandan Mohanty and Sonali Raj Mohanty are

directors of the company, who have contributed Rs.7,50,000/- and

Rs.3,25,000/- respectively towards share application money. In support

of the identity and source, ld A.R. filed before me copy of income tax

returns of Nandan Mohanty and Sonali Raj Mohanty wherefrom it was

pointed out that they had filed return of income showing income of

Rs.6,99,710/- and Rs.2,50,000/- respectively. He submitted that both

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these directors are income tax assessee and are filing income tax returns

regularly showing similar amount of income. Hence, it was his

submission that the share application money given in cash was out of

taxed income. It was submitted that the identity and creditworthiness of

these two share applicants is proved from the copies of income tax

returns filed and their PAN. He further argued that out of balance 95

shareholders from whom Rs.35,000/- each was received during the year

as share money, the Assessing Officer had called eight persons for

verification. With regards to 87 shareholders, no enquiry whatsoever was

made by the Assessing Officer and, therefore, the Assessing Officer was

not justified in making addition of Rs.33,25,000/- u/s.68 of the Act.

Regarding balance 8 persons from whom share application money of

Rs.2,80,000/- was received , he submitted that they have contributed

meagre amount of Rs.35,000/- towards share application money and it

cannot be said that those persons could not have this meagre amount

contributed towards share application money. He further submitted that

in the subsequent assessment year 2011-12, the assessee company has

allowed shares to the share applicants and filed the required returns with

the Registrar of Companies and that they are still shareholders of the

assessee company. In support of the same, he filed copy of audited

account as on 31.3.2011 and 31.3.2010 and submitted that share

application money shown as on 31.3.2010 was transferred to share

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capital account. Hence, he prayed addition of Rs.44 lakhs made by the

Assessing officer should be deleted.

ld A.R. of the assessee and submitted that it was highly improbable that

the assessee would receive share application money from 95 share

applicants in identical amount of Rs.35,000/- each and that too in cash.

He submitted that the identity, genuineness and creditworthiness has not

been proved and, therefore, the addition was rightly made by the

Assessing Officer and confirmed by the CIT(A).

authorities and materials available on record. In the instant case, the

assessee company has claimed to have received Rs.44,00,000/- as share

application money during the year under consideration. The said amount

was claimed to have received from Shri Nandan Mohanty of Rs.7,50,000/-

and Sonali Raj Mohanty of Rs.3,25,000/- and balance amount of

Rs.33,25,000/- from 95 persons of Rs.35,000/- each. During the course

of assessment proceedings, the Assessing Officer in order to verify the

genuineness of share application claimed to have received by the

assessee required the assessee to produce the following persons and file

documents in support of share application money:

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Sl. No. Name of the person and address 01. Nandan Mohanty, Jharapada ,BDA Colony,Bhubaneswar. 02. Sonaliraj Mohanty,Jharapada ,BDA Colony, Bhubaneswar. 03. Basanta Swain,Osangara, Jigarana, Kendrapara. 04. Banambar SamaLAlati Bharatpur. 05' Muralidhar Panigrahi, Khairajala.PO-Alasu. 06. Pramod Kumar Panda, Sunaribuguda,Madhupali. 07. BibhudattaSamai.Baramunda.H.B.Colony, Bhubaneswar. 03.. 08. Manoj Kumar Muduli. Bnatapara.Salipur. 09. Prabir Kumar Swaina ,Ssilo,Balakati. 10. Bichitrananda Swain,Andeisahi.Jagatpur.Cuttack. 9. In response thereto, the assessee filed income tax return of Shri

Nandan Mohanty and Sonali Raj Mohanty. The assessee also submitted

PAN of said two persons and pointed out that their income for the

assessment year 2010-2011 was Rs.6,99,710/- and Rs.2,50,000/-,

respectively and similar amount of income was also shown by them in

their earlier years’ return of income. Thereafter, the Assessing Officer

added the entire amount of Rs.44,00,000/- to the income of the assessee

by treating the share applications as bogus.

Mohanty and Rs.3,25,000/- from Sonali Raj Mohanty, the assessee has

not only filed their PAN but established their identity and also filed copy of

return of income to establish their creditworthiness. It is observed that

both of them are directors of the assessee company and have confirmed

the above transaction of share application by signing the audited accounts

of the assessee. Thus, in my considered view, the initial onus which was

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on the assessee under law in respect of transaction in question was duly

discharged by the assessee company. I find that no material has been

brought on record by the Assessing Officer to show that above transaction

of share application was bogus. Therefore, in my considered view

addition of Rs.7,50,000/- and Rs.3,25,000/- cannot be sustained.

from 8 persons aggregating to Rs.2,80,000/-, I find that the assessee

could not file any documentary evidence in support of above claim of

receipt of share application money inspite of the fact that it was called

upon by the Assessing Officer to do so. The sole argument of the

assessee is that in the subsequent assessment year, shares were duly

allotted to the persons. In my considered view, merely from the above

fact it cannot be held that the onus which was on the assessee to prove

the genuineness of share application money was discharged by it.

Therefore, I do not find any good reason to interfere with the orders of

lower authorities to the extent of addition of Rs.2,80,000/- pertaining to

the said 8 persons.

relating to 87 persons, I find that the assessee has duly furnished their

name and address to the Assessing Officer during the course of

assessment proceedings. Thereafter the Assessing Officer not made any

enquiry in respect of said 87 persons. The Assessing Officer also not

required the assessee to furnish any further material in respect of share

14 ITA No. 85/ CTK/2017 Asse ssment Year :20 10- 201 1

application money received from said 87 persons. In my considered view,

the addition of Rs.30,45,000/- relating to 87 persons could not have been

made by the Assessing Officer without making any further enquiry.

Therefore, addition of Rs.30,45,000/- is not sustained. Thus, out of

Rs.44,00,000/-, addition of Rs.41,20,000/- is hereby deleted and addition

of Rs.2,80,000/- is confirmed.

Order pronounced in the open court on 09/08/2017.

Sd/- (N.S Saini) ACCOUNTANT MEMBER

Cuttack; Dated 09/08/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The appellant : Makeway Consultancy Pvt Ltd., Plot No.232, Saheed Nagar, Bhubaneswar 2. The respondent: DCIT, Circle 1(1), Bhubaneswar 3. The CIT(A) -1, Bhubaneswar 4. Pr.CIT-1, Bhubaneswar BY ORDER, 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// SR.PRIVATE SECRETARY ITAT, Cuttack