CIT v. Sophia Finance Ltd.

205 ITR 98High Court1994#265 most cited

What is CIT v. Sophia Finance Ltd. authority for?

To discharge the burden of proof under Section 68 for share capital or share application money, an assessee must establish the identity of the shareholders and the genuineness of the transaction, confirming that the payment was truly made by them.

295

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2008 to 2026.

Also referred to as

CIT v. Sophia Finance Ltd. · Section 68 · cash credit · share capital · share application money · burden of proof · identity of shareholders · genuineness of transaction · 205 ITR 98 · unexplained money

Also reported as

70 Taxmann 69

Sections most often in play

Section 1961Section 68Section 142(1)Section 148Section 68 of the Income Tax ActSection 133(6)Section 143(3)Section 143(2)

Issues it is cited on

paper companysource of sourcesection 31creditworthiness of the creditorshare capital and share premiumsection 251(2)section 251(1)(a)live linkshare application moneyentry operatoradmission of additional evidenceaddition u/s 68

Judgments citing CIT v. Sophia Finance Ltd.

Commissioner of Income Tax -3 vs. Five Vision Promoters Pvt.Ltd

The appeals are dismissed but in the circumstances, with no orders as

ITA/235/2015HC Delhi27 Nov 2015
Section 260A

…s of this Court including CIT v. Divine Leasing and Finance Ltd. 299 ITR 268. Reliance was also placed on the decision of 2015:DHC:9679-DB ITA Nos. 234, 235 & 236/2015 Page 16 of 23 this Court in (1994) CIT v. Sophia Finance Ltd. (1994)205 ITR 98 (FB) (Del). Law concerning Section 68 of the Act 28. Before proceeding to discuss the above submissions, a brief recapitulation of the legal position as regards Section 68 of the Act is necessary. Under Section 68 of the Act, the AO has jurisdiction to undertake enquiries with regard to the amount credited in the books of the accounts of…

Commissioner of Income Tax -3 vs. Five Vision Promoters Pvt.Ltd

The appeals are dismissed but in the circumstances, with no orders as

ITA/236/2015HC Delhi27 Nov 2015
Section 260A

…s of this Court including CIT v. Divine Leasing and Finance Ltd. 299 ITR 268. Reliance was also placed on the decision of 2015:DHC:9679-DB ITA Nos. 234, 235 & 236/2015 Page 16 of 23 this Court in (1994) CIT v. Sophia Finance Ltd. (1994)205 ITR 98 (FB) (Del). Law concerning Section 68 of the Act 28. Before proceeding to discuss the above submissions, a brief recapitulation of the legal position as regards Section 68 of the Act is necessary. Under Section 68 of the Act, the AO has jurisdiction to undertake enquiries with regard to the amount credited in the books of the accounts of…

Commissioner of Income Tax -3 vs. Five Vision Promoters Pvt.Ltd

The appeals are dismissed but in the circumstances, with no orders as

ITA/234/2015HC Delhi27 Nov 2015
Section 260A

…s of this Court including CIT v. Divine Leasing and Finance Ltd. 299 ITR 268. Reliance was also placed on the decision of 2015:DHC:9679-DB ITA Nos. 234, 235 & 236/2015 Page 16 of 23 this Court in (1994) CIT v. Sophia Finance Ltd. (1994)205 ITR 98 (FB) (Del). Law concerning Section 68 of the Act 28. Before proceeding to discuss the above submissions, a brief recapitulation of the legal position as regards Section 68 of the Act is necessary. Under Section 68 of the Act, the AO has jurisdiction to undertake enquiries with regard to the amount credited in the books of the accounts of…

Director of Income Tax vs. Jet Lite (India) Ltd

The appeals are disposed of in the above terms with no order as to

ITA - 205 / 2002HC Delhi04 Nov 2015
Section 260A

…ITA Nos. 204/2002 & batch matters Page 16 of 42 cash credits under Section 68 of the Act. 27. A Full Bench of this Court in CIT v. Sophia Finance Limited (1994) 205 ITR 98 [FB, (Delhi)] held that in the context of Section 68 of the Act that: (i) The Assessee has to prima facie prove "(1) the identity of the creditor/subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the c…

Jet Lite (India) Ltd vs. Commissioner of Income Tax- Xvi

The appeals are disposed of in the above terms with no order as to

ITA - 204 / 2002HC Delhi04 Nov 2015
Section 260A

…ITA Nos. 204/2002 & batch matters Page 16 of 42 cash credits under Section 68 of the Act. 27. A Full Bench of this Court in CIT v. Sophia Finance Limited (1994) 205 ITR 98 [FB, (Delhi)] held that in the context of Section 68 of the Act that: (i) The Assessee has to prima facie prove "(1) the identity of the creditor/subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the c…

Jet Lite (India) Ltd vs. Commissioner of Income Tax-Xvi

The appeals are disposed of in the above terms with no order as to

ITA/1206/2005HC Delhi04 Nov 2015
Section 260A

…ITA Nos. 204/2002 & batch matters Page 16 of 42 cash credits under Section 68 of the Act. 27. A Full Bench of this Court in CIT v. Sophia Finance Limited (1994) 205 ITR 98 [FB, (Delhi)] held that in the context of Section 68 of the Act that: (i) The Assessee has to prima facie prove "(1) the identity of the creditor/subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the c…

Jet Lite (India) Ltd vs. Commissioner of Income Tax-Xvi

The appeals are disposed of in the above terms with no order as to

ITA/204/2002HC Delhi04 Nov 2015
Section 260A

…ITA Nos. 204/2002 & batch matters Page 16 of 42 cash credits under Section 68 of the Act. 27. A Full Bench of this Court in CIT v. Sophia Finance Limited (1994) 205 ITR 98 [FB, (Delhi)] held that in the context of Section 68 of the Act that: (i) The Assessee has to prima facie prove "(1) the identity of the creditor/subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the c…

Jet Lite (India) Ltd vs. Commissioner of Income Tax-Xvi

The appeals are disposed of in the above terms with no order as to

ITA/128/2005HC Delhi04 Nov 2015
Section 260A

…ITA Nos. 204/2002 & batch matters Page 16 of 42 cash credits under Section 68 of the Act. 27. A Full Bench of this Court in CIT v. Sophia Finance Limited (1994) 205 ITR 98 [FB, (Delhi)] held that in the context of Section 68 of the Act that: (i) The Assessee has to prima facie prove "(1) the identity of the creditor/subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the c…

Jet Lite (India) Ltd vs. Commissioner of Income Tax-Xvi

The appeals are disposed of in the above terms with no order as to

ITA/205/2002HC Delhi04 Nov 2015
Section 260A

…ITA Nos. 204/2002 & batch matters Page 16 of 42 cash credits under Section 68 of the Act. 27. A Full Bench of this Court in CIT v. Sophia Finance Limited (1994) 205 ITR 98 [FB, (Delhi)] held that in the context of Section 68 of the Act that: (i) The Assessee has to prima facie prove "(1) the identity of the creditor/subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the c…

Jet Lite (India) Ltd vs. Commissioner of Income Tax-Xvi

The appeals are disposed of in the above terms with no order as to

ITA/86/2011HC Delhi04 Nov 2015
Section 260A

…ITA Nos. 204/2002 & batch matters Page 16 of 42 cash credits under Section 68 of the Act. 27. A Full Bench of this Court in CIT v. Sophia Finance Limited (1994) 205 ITR 98 [FB, (Delhi)] held that in the context of Section 68 of the Act that: (i) The Assessee has to prima facie prove "(1) the identity of the creditor/subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the c…

Jet Lite (India) Ltd vs. Commissioner of Income Tax-Xvi

The appeals are disposed of in the above terms with no order as to

ITA/1209/2005HC Delhi04 Nov 2015
Section 260A

…ITA Nos. 204/2002 & batch matters Page 16 of 42 cash credits under Section 68 of the Act. 27. A Full Bench of this Court in CIT v. Sophia Finance Limited (1994) 205 ITR 98 [FB, (Delhi)] held that in the context of Section 68 of the Act that: (i) The Assessee has to prima facie prove "(1) the identity of the creditor/subscriber; (2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the c…

DCIT CC-45, Mumbai vs. Paramshkti Distributors P. Ltd, Mumbai

In the result, appeal of the assessee is allowed, whereas appeal of the revenue is allowed in part in terms indicated hereinabove

ITA 9224/MUM/2010[2006-07]Status: DisposedITAT Mumbai09 Oct 2015AY 2006-07

Bench: Shri R.C.Sharma, Am & Shri Pawan Singh, Jm आमकय अऩीर सिं./Ita No.8748/Mum/2010 (नििाारण वषा / Assessment Year :2005-2006) M/S Paramshakti Distributors Pvt. Vs. Acit, Cent. Cir-45, Ltd., 501-B, Elegant Business Mumbai Park, Andheri-Kurla Road, J.B.Nagar, Andheri(E), Mumbai- 400059 स्थममी रेखम सिं./ जीआइआय सिं./ Pan/Gir No. : Aabcp 5835 C (अऩीरमथी /Appellant) (प्रत्मथी / Respondent) .. & आमकय अऩीर सिं./Ita Nos.9223&9224/Mum/2010 (नििाारण वषा / Assessment Years :2005-06 & 2006-07) Acit, Cent. Cir-45, Mumbai Vs. M/S Paramshakti Distributors Pvt. Ltd., 501-B, Elegant Business Park, Andheri-Kurla Road, J.B.Nagar, Andheri(E), Mumbai-400059 स्थममी रेखम सिं./ जीआइआय सिं./ Pan/Gir No. : Aabcp 5835 C (अऩीरमथी /Appellant) (प्रत्मथी / Respondent) .. यनधमवरयती की ओर से /Assessee By : Shri Vijay Mehta यमजस्र् की ओर से /Revenue By :Shri Deepkant Prasad & Shri Nimesh Yadav सुनर्मई की तमयीख / Date Of Hearing : 26/08/2015 घोषणम की तमयीख/Date Of Pronouncement 09/10/2015 आदेश / O R D E R Per R.C.Sharma (A.M):

For Appellant: Shri Vijay MehtaFor Respondent: Shri Deepkant Prasad & Shri Nimesh Yadav
Section 143(3)Section 68

…e applied to such sums received by a company and credited in the share capital account of the company. This judgment of Hon'ble Delhi High Court did not find favour with subsequent larger bench of Delhi High Court and in the case of CIT vs. Sophia Finance Ltd 205 ITR 98 (Del) (FB) full bench of Hon'ble Delhi High Court held that provisions of section 68 apply to the credits representing share application money /share capital subscription in the same manner as ordinary cash credits. In that judgment it was further held that if the shareholder exists then possibly no further enquiry need be made. But if the Income…

DCIT CC-45, Mumbai vs. Paramshkti Distributors P. Ltd, Mumbai

In the result, appeal of the assessee is allowed, whereas appeal of the revenue is allowed in part in terms indicated hereinabove

ITA 9223/MUM/2010[2005-06]Status: DisposedITAT Mumbai09 Oct 2015AY 2005-06

Bench: Shri R.C.Sharma, Am & Shri Pawan Singh, Jm आमकय अऩीर सिं./Ita No.8748/Mum/2010 (नििाारण वषा / Assessment Year :2005-2006) M/S Paramshakti Distributors Pvt. Vs. Acit, Cent. Cir-45, Ltd., 501-B, Elegant Business Mumbai Park, Andheri-Kurla Road, J.B.Nagar, Andheri(E), Mumbai- 400059 स्थममी रेखम सिं./ जीआइआय सिं./ Pan/Gir No. : Aabcp 5835 C (अऩीरमथी /Appellant) (प्रत्मथी / Respondent) .. & आमकय अऩीर सिं./Ita Nos.9223&9224/Mum/2010 (नििाारण वषा / Assessment Years :2005-06 & 2006-07) Acit, Cent. Cir-45, Mumbai Vs. M/S Paramshakti Distributors Pvt. Ltd., 501-B, Elegant Business Park, Andheri-Kurla Road, J.B.Nagar, Andheri(E), Mumbai-400059 स्थममी रेखम सिं./ जीआइआय सिं./ Pan/Gir No. : Aabcp 5835 C (अऩीरमथी /Appellant) (प्रत्मथी / Respondent) .. यनधमवरयती की ओर से /Assessee By : Shri Vijay Mehta यमजस्र् की ओर से /Revenue By :Shri Deepkant Prasad & Shri Nimesh Yadav सुनर्मई की तमयीख / Date Of Hearing : 26/08/2015 घोषणम की तमयीख/Date Of Pronouncement 09/10/2015 आदेश / O R D E R Per R.C.Sharma (A.M):

For Appellant: Shri Vijay MehtaFor Respondent: Shri Deepkant Prasad & Shri Nimesh Yadav
Section 143(3)Section 68

…e applied to such sums received by a company and credited in the share capital account of the company. This judgment of Hon'ble Delhi High Court did not find favour with subsequent larger bench of Delhi High Court and in the case of CIT vs. Sophia Finance Ltd 205 ITR 98 (Del) (FB) full bench of Hon'ble Delhi High Court held that provisions of section 68 apply to the credits representing share application money /share capital subscription in the same manner as ordinary cash credits. In that judgment it was further held that if the shareholder exists then possibly no further enquiry need be made. But if the Income…

Parashakti Distributors P. Ltd, Mumbai vs. ACIT Cen Cir 45, Mumbai

In the result, appeal of the assessee is allowed, whereas appeal of the revenue is allowed in part in terms indicated hereinabove

ITA 8748/MUM/2010[2005-06]Status: DisposedITAT Mumbai09 Oct 2015AY 2005-06

Bench: Shri R.C.Sharma, Am & Shri Pawan Singh, Jm आमकय अऩीर सिं./Ita No.8748/Mum/2010 (नििाारण वषा / Assessment Year :2005-2006) M/S Paramshakti Distributors Pvt. Vs. Acit, Cent. Cir-45, Ltd., 501-B, Elegant Business Mumbai Park, Andheri-Kurla Road, J.B.Nagar, Andheri(E), Mumbai- 400059 स्थममी रेखम सिं./ जीआइआय सिं./ Pan/Gir No. : Aabcp 5835 C (अऩीरमथी /Appellant) (प्रत्मथी / Respondent) .. & आमकय अऩीर सिं./Ita Nos.9223&9224/Mum/2010 (नििाारण वषा / Assessment Years :2005-06 & 2006-07) Acit, Cent. Cir-45, Mumbai Vs. M/S Paramshakti Distributors Pvt. Ltd., 501-B, Elegant Business Park, Andheri-Kurla Road, J.B.Nagar, Andheri(E), Mumbai-400059 स्थममी रेखम सिं./ जीआइआय सिं./ Pan/Gir No. : Aabcp 5835 C (अऩीरमथी /Appellant) (प्रत्मथी / Respondent) .. यनधमवरयती की ओर से /Assessee By : Shri Vijay Mehta यमजस्र् की ओर से /Revenue By :Shri Deepkant Prasad & Shri Nimesh Yadav सुनर्मई की तमयीख / Date Of Hearing : 26/08/2015 घोषणम की तमयीख/Date Of Pronouncement 09/10/2015 आदेश / O R D E R Per R.C.Sharma (A.M):

For Appellant: Shri Vijay MehtaFor Respondent: Shri Deepkant Prasad & Shri Nimesh Yadav
Section 143(3)Section 68

…e applied to such sums received by a company and credited in the share capital account of the company. This judgment of Hon'ble Delhi High Court did not find favour with subsequent larger bench of Delhi High Court and in the case of CIT vs. Sophia Finance Ltd 205 ITR 98 (Del) (FB) full bench of Hon'ble Delhi High Court held that provisions of section 68 apply to the credits representing share application money /share capital subscription in the same manner as ordinary cash credits. In that judgment it was further held that if the shareholder exists then possibly no further enquiry need be made. But if the Income…

Commissioner of Income Tax vs. M/S Navodaya Castles Pvt Ltd

ITA/320/2012HC Delhi25 Aug 2014
Section 139Section 143(1)Section 143(2)Section 147Section 148Section 68

…7 (DB) (Del) and Commissioner of Income Tax-II Vs. MAF Academy P. Ltd., 206 (2014) DLT 277 (DB) (Del). The aforesaid decisions mentioned above refer to the earlier decisions of Delhi High Court in Commissioner of Income Tax Vs. Sophia Finance Ltd., [1994] 205 ITR 98 (FB)(Delhi), CIT Vs. Divine Leasing and Finance Limited [2008] 299 ITR 268 (Delhi) and observations of the Supreme Court in CIT Vs. Lovely Exports P. Ltd. [2008] 319 ITR (St.) 5 (SC). 12. The main submission of the learned counsel for the assessee is that once the assessee had been able to show that the shareholder companies were duly inc…

CIT vs. Globus Securities & Finance Pvt Ltd

ITA/409/2012HC Delhi10 Dec 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

Section 68

…pted.” With reference to two decisions, it was further held “25. In Lovely Exports (supra), a Division Bench examined two earlier decisions of this court in CIT vs. Steller Investment Ltd. [1991] 192 ITR 287 (Delhi) and CIT vs. Sophia finance Ltd. [1994] 205 ITR 98 (FB) (Delhi). The decision in Steller Investment’s case ITA 409/2012 Page 9 of 20 (supra) was affirmed by the Supreme court but, by observing that the conclusion was on the facts and no interference was called for. Lovely Exports (supra) was a case of publi…

Commissioner of Income Tax-II vs. Maf Academy P. Ltd

ITA-341/2012HC Delhi28 Nov 2013
Section 143(1)Section 148Section 260A(1)Section 68

…masquerade as pretence should be exposed and not accepted. 25. In Lovely Exports (supra), a Division Bench examined two earlier decisions of this court in CIT vs. Steller Investment Ltd. [1991] 192 ITR 287 (Delhi) and CIT vs. Sophia finance Ltd. [1994] 205 ITR 98 (FB) (Delhi). The decision in Steller Investment’s case (supra) was affirmed by the Supreme court but by observing that the conclusion was on the facts and no interference was called for. Lovely Exports (supra) was a case of public limited company 2013:DHC:6128 =====================================================================…

Commissioner of Income Tax-II vs. Maf Academy P. Ltd

ITA/341/2012HC Delhi28 Nov 2013
Section 143(1)Section 148Section 260A(1)Section 68

…masquerade as pretence should be exposed and not accepted. 25. In Lovely Exports (supra), a Division Bench examined two earlier decisions of this court in CIT vs. Steller Investment Ltd. [1991] 192 ITR 287 (Delhi) and CIT vs. Sophia finance Ltd. [1994] 205 ITR 98 (FB) (Delhi). The decision in Steller Investment’s case (supra) was affirmed by the Supreme court but by observing that the conclusion was on the facts and no interference was called for. Lovely Exports (supra) was a case of public limited company 2013:DHC:6128 =====================================================================…

CIT vs. Nr Portfolio Pvt Ltd

ITA/1019/2011HC Delhi22 Nov 2013

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

Section 143(1)Section 144Section 147Section 68

…exposed and not accepted. 25. hiLovely Exports (supra), aDivision Bench examined two earlier decisions of this com-t in CIT vs. Steller Investment Ltd. [1991] 192 ITANos. 1018/2011 &1019/2011 Page 17of24 ITR 287 (Delhi) and CIT vs. Sophiafinance Ltd. [1994] 205 ITR 98 (FB) (Delhi). The decision in Steller Investment's case (supra) was affirmed by the Supreme court but, by observing that the conclusion was on the facts and no interference was called for. Lovely Exports (supra) was a case of public limited company where shares were subscribed bypublic and itwas accordingly observed:- "This reasoning must apply a…

Commissioner of Income Tax vs. Nr Portfolio Pvt Ltd

ITA/1018/2011HC Delhi22 Nov 2013
Section 143(1)Section 144Section 147Section 68

…er decisions of this court in CIT vs. Steller Investment Ltd. [1991] 192 2013:DHC:6020-DB ITA Nos. 1018/2011 & 1019/2011 Page 18 of 24 ITR 287 (Delhi) and CIT vs. Sophia finance Ltd. [1994] 205 ITR 98 (FB) (Delhi). The decision in Steller Investment’s case (supra) was affirmed by the Supreme court but, by observing that the conclusion was on the facts and no interference was called for. Lovely Exports (supra) was a case of public limited company where shares were subscribed by public and it was accordingly observed:- “This reasoning mus…