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“share application money”

Cash Credits & Unexplained ItemsSection 68Section 682,489 judgments

The decision most relied on for share application money is CIT v. Lovely Exports (P) Ltd. (216 CTR 195), cited in 854 judgments on BharatTax.

Leading authorities on share application money

CIT v. Lovely Exports (P) Ltd.
216 CTR 195 · 2008 · Supreme Court
854
citing judgments

If an assessee company receives share application money from alleged bogus shareholders and provides their details to the Assessing Officer, no addition can be made under Section 68 in the company's hands; the Department must proceed against the shareholders by reopening their individual assessments.

(Central)-1 v. NRA Iron & Steel (P) Ltd.
103 Taxmann.com 48 · 2019 · Supreme Court
696
citing judgments

When assessing cash credits, share capital, or loans, the assessee bears the onus to prove the identity, creditworthiness, and genuineness of transactions. This burden is not discharged merely by documentary evidence if field inquiries reveal accommodation entries or dealings with paper/shell companies.

Commissioner of Income Tax v. Nova Promoters and Finlease (P) Ltd.
342 ITR 169 · 2012 · High Court
658
citing judgments

To make an addition under Section 68 for unexplained cash credits, the Assessing Officer must conduct proper inquiry into the identity, genuineness, and creditworthiness of the creditor, especially concerning share application money. The assessee's initial discharge of burden by providing necessary details shifts the onus back to the AO for further investigation, including the source of source.

Nemi Chand Kothari v. CIT
264 ITR 254 · 2003 · High Court
340
citing judgments

For a cash credit, merely transacting by cheque is insufficient to discharge the assessee's burden of proof. The assessee must prove the identity of the creditors, the genuineness of the transaction, and the creditworthiness of the creditors; upon which, the burden shifts to the revenue.

CIT v. Kamdhenu Steel & Alloys Ltd.
361 ITR 220 · 2014 · High Court
328
citing judgments

When making an addition under section 68, the creditworthiness or financial strength of an investor contributing share capital or share application money can be proved by producing their bank statements showing sufficient balance for the investment. The Supreme Court dismissed the SLP against this decision.

CIT v. Sophia Finance Ltd.
205 ITR 98 · 1994 · High Court
295
citing judgments

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.

CIT v. Oasis Hospitalities P. Ltd.
333 ITR 119 · 2011 · High Court
292
citing judgments

When explaining cash credits under Section 68, the assessee must establish the identity of the creditor, their creditworthiness or financial capacity, and the genuineness of the transaction. Merely proving identity does not discharge this initial onus, which shifts to the Assessing Officer once these three elements are prima facie proven.

CIT v. Nipun Builders & Developers
350 ITR 407 · 2013 · High Court
264
citing judgments

For any sum credited in an assessee's books, including share application money, the assessee must prove the identity and creditworthiness of the creditor and the genuineness of the transaction. Failure to discharge this onus under Section 68 renders the amount taxable.

Judgments citing share application money

Income Tax Officer, Jaipur vs. Kedia Builders and Colonizers Private Limited, Jaipur

In the result, all appeals of the revenue are stands dismissed

ITA 872/JPR/2024[2012-13]Status: DisposedITAT Jaipur11 Mar 2025AY 2012-13
For Appellant: Sh. Sidharth RankaFor Respondent: Mrs. Anita Rinesh, JCIT-DR
Section 143(3)Section 147

managed by Shri Mukesh Banka. 11. Based on the detailed observation ld. AO added a sum of Rs. 90,00,385/- being the share application money from these companies as unexplained income of the assessee company as per provision of section 68 of the Act. The ld. AO also added ... external information and statements without conducting any independent verification. 2) Material Disclosure in Original Assessment: The appellant argued that all details related to share application money and its sources were already disclosed during the original scrutiny assessment under Section 143(3). 3) Incorrect Application of Law: The appellant highlighted that

Agrawal Solutions Private Limited, Mumbai vs. Deputy Commissioner of Income Tax-Circle- 4(1)(1), Mumbai Aaykar Bhavan

In the result, the cross appeals filed by the assessee and the revenue are allowed for statistical purpose

ITA 3388/MUM/2024[2013-14]Status: DisposedITAT Mumbai11 Mar 2025AY 2013-14

Bench: SHRI. OM PRAKASH KANT (Accountant Member), MS. KAVITHA RAJAGOPAL (Judicial Member)

For Appellant: Shri. Snehal Shah & Shri. SiddharthFor Respondent: Shri. Ram Krishn Kedia (SR.DR.)
Section 250Section 68

deleting the addition to the extent of Rs. 52,20,000/- out of Rs. 69,20,000/-made u/s 68 on account of share application money received after admitting additional evidence without calling for remand report from the AO which is in violation of Rule 46A of the Income ... deleting the addition to the extent of Rs. 52,20,000/- out of Rs. 69,20,000/- made u/s 68 on account of share application money received without appreciating the fact that the AO during the assessment proceedings held that the assessee didn't bring anything on record to show

Assistant Commissioner of Income Tax-4(1)(1), Mumbai vs. Agrawal Solutions Private Limited, Mumbai

In the result, the cross appeals filed by the assessee and the revenue are allowed for statistical purpose

ITA 3356/MUM/2024[2013-14]Status: DisposedITAT Mumbai11 Mar 2025AY 2013-14
For Appellant: Shri. Snehal Shah & Shri. SiddharthFor Respondent: Shri. Ram Krishn Kedia (SR.DR.)
Section 250Section 68

deleting the addition to the extent of Rs. 52,20,000/- out of Rs. 69,20,000/-made u/s 68 on account of share application money received after admitting additional evidence without calling for remand report from the AO which is in violation of Rule 46A of the Income ... deleting the addition to the extent of Rs. 52,20,000/- out of Rs. 69,20,000/- made u/s 68 on account of share application money received without appreciating the fact that the AO during the assessment proceedings held that the assessee didn't bring anything on record to show

Assistant Commissioner of Income-Tax Circle-3(1)(1), Ahmedabad vs. Shri Govind Jairamdas Changlani, Ahmedabad

In the result, the appeal filed by the Revenue is hereby dismissed

ITA 183/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad07 Mar 2025AY 2016-17

Bench: DR. BRR KUMAR (Vice President), Shri T.R. SENTHIL KUMAR (Judicial Member)

Section 143(3)Section 145ASection 68

through this decision also and found that in that case, the company introduced the money in the name of share capital or as share application money and did not respond to the notices issued by the Hon'ble Supreme Court whereas in the case of the appellant

Om Prakash Tantia, Faridabad vs. DCIT, Central Circle-25, New Delhi

ITA 4737/DEL/2018[2015-16]Status: DisposedITAT Delhi07 Mar 2025AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 132Section 143(1)Section 143(2)Section 147Section 148

assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed ... held that amendment made in section 68 of the Act w.e.f. 01.04.2013 empowers the A.O. to examine source of source in case of share application money / share capital / share premium from 01.04.2013 and this amendment does not give power to the A.O. to examine source of source of non-share

ITO, Ward-25(2), New Delhi vs. Telplay Packaging Solutions P.Ltd, New Delhi

The appeal of the Revenue is dismissed

ITA 5892/DEL/2017[2012-13]Status: DisposedITAT Delhi07 Mar 2025AY 2012-13

Bench: SHRI ANUBHAV SHARMA (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)

Section 143(3)Section 14ASection 234BSection 68

assessee is a company, (not being a company in which the public are substantially interested) and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed

M/S. Emerald Properties Pvt. Ltd., Kolkata vs. ITO, Ward-5(3), Kolkata.

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1043/KOL/2023[2012-13]Status: DisposedITAT Kolkata06 Mar 2025AY 2012-13

Bench: Shri Duvvuru Rl Reddy(Kz) & Shri Rakesh Mishra

Section 131Section 143(3)Section 250Section 68

Directors of the shareholder companies did not appear before the Ld. AO, the sum of Rs. 7,25,67,000/- credited as share application money along with premium was added to the income of the assessee u/s 68 of the Act. The Ld. AR submitted that most of the share

Assistant Commissioner of Income Tax, Mumbai vs. Hira Technologies Private Limited, Pune, Maharashtra

In the result, the appeal by the Revenue is dismissed

ITA 5028/MUM/2024[2016-17]Status: DisposedITAT Mumbai06 Mar 2025AY 2016-17

Bench: Shri Sandeep Singh Karhailsmt. Renu Jauhriassistant Commissioner Of Income Tax, Room No.126, 1St Floor, Aaykar Bhawan, Maharishi Karve Road, Mumbai - 400020 ……………. Appellant Maharashtra V/S Hira Technologies Private Limited Plot No.1, Part-Ii, Khed City Taluka Khed, Rajgurunagar Pune, Dta Village, ……………. Respondent Khanesar, Pune – 410505 Pan: Aabch2291N

For Appellant: Shri Sanjay SanghviFor Respondent: Ms. Neena Jeph, CIT-DR
Section 142(1)Section 143(2)Section 250Section 68

finding that the details and evidences submitted by the assessee were sufficient to prove the genuineness of the transaction of receipt of share application money/ premium money. (b) "On the facts and circumstances of the case and in law, whether the learned Ld. CIT(A) was right in holding that ... based on the limited details submitted before the AO, had discharged its onus to prove the genuineness of the transactions of receipt of share application money/ premium money, without appreciating the fact that the investors were not resident of the India and money had flown from the sources outside

Kuber Metpack P.Ltd ( Formerly Known As Kevin Metpack P.Ltd), Delhi vs. ACIT, Central Circle-30, New Delhi

In the result appeal of assessee vide ITR Nos

ITA 1408/DEL/2022[2011-12]Status: DisposedITAT Delhi06 Mar 2025AY 2011-12

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla

For Appellant: Shri Rajiv Khandelwal, CA &For Respondent: Shri Dayainder Singh Sidhu, CIT(DR)
Section 132Section 68

under Section 68 of the Act, and its affirmation by the Ld. CIT(A). The assessee had reportedly taken share application money of Rs. 5,90,00,000/- from one M/s Powmex Sales Pvt. Ltd., a Calcutta based company. The Ld. Counsel for the assessee submitted that order ... Kolkata. The Ld. AO had concluded that the said M/s Powmex Sales Pvt. Ltd. did not had sufficient creditworthiness qua the impugned share application money. He also held the view that the said company was a non-existent entity. Page 10 of 43 9. The Ld. Counsel for the assessee

Kuber Khadyan Pvt. Ltd., New Dlehi vs. ACIT, Central Circle- 30, New Delhi

In the result appeal of assessee vide ITR Nos

ITA 320/DEL/2019[2015-16]Status: DisposedITAT Delhi06 Mar 2025AY 2015-16

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla

For Appellant: Shri Rajiv Khandelwal, CA &For Respondent: Shri Dayainder Singh Sidhu, CIT(DR)
Section 132Section 68

under Section 68 of the Act, and its affirmation by the Ld. CIT(A). The assessee had reportedly taken share application money of Rs. 5,90,00,000/- from one M/s Powmex Sales Pvt. Ltd., a Calcutta based company. The Ld. Counsel for the assessee submitted that order ... Kolkata. The Ld. AO had concluded that the said M/s Powmex Sales Pvt. Ltd. did not had sufficient creditworthiness qua the impugned share application money. He also held the view that the said company was a non-existent entity. Page 10 of 43 9. The Ld. Counsel for the assessee

Tajshree Autowheels Private Limited, Nagpur vs. ACIT Circle-4, Nagpur

In the result, assessee’s appeal is allowed for statistical purposes

ITA 400/NAG/2024[2014-15]Status: DisposedITAT Nagpur04 Mar 2025AY 2014-15

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Madhav VichoreFor Respondent: Shri Abhay Y. Marathe
Section 56(2)Section 56(2)(viib)

consideration for issue of shares that exceeds the face value of such shares) and disregarding the facts and circumstances of instant case where share application money was received by banking channel in the month of March 13 and was also reflected in balance sheet of said for financial ... pending share application money and allotment of shares has only occurred in F.Y.2013-14 relevant to current AY 14-15. 8. On the facts and circumstances in the law, the Learned CIT(A) erred to confirm the action of AO to tax the money in the current

Ardh Metals and Alloys Private Limited, Mumbai vs. Assessing Officer, Circle 5(1)(1), Mumbai

In the result, the appeal filed by the assessee is allowed for statistical purpose

ITA 5868/MUM/2024[2012-2013]Status: DisposedITAT Mumbai03 Mar 2025AY 2012-2013

Bench: Shri. Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri. Anand KanseFor Respondent: Shri. K. R. Subhash
Section 139(1)Section 143(1)Section 143(2)Section 143(3)Section 148Section 250Section 68

Post/Courier on the postal address. (2) On the facts and in law, the learned CIT(A) erred in confirming the addition of share application money of Rs. 3,84,00,000/- made u/s 68 of the Income Tax Act, 1961 on the basis of information received from the investigation wing ... were found by the learned AO. (3) On the facts and in law, the learned CIT(A) erred in confirming the addition of share application money of Rs. 3,84,00,000/- made u/s 68 of the Income Tax Act, 1961 on the basis of recorded statement of Shri Praveen

Ardh Metals and Alloys Private Limited, Mumbai vs. Assessing Officer, Circle 5(1)(1), Aayakar Bhavan

In the result, the appeal filed by the assessee is allowed for statistical purpose

ITA 5853/MUM/2024[2008-2009]Status: DisposedITAT Mumbai03 Mar 2025AY 2008-2009

Bench: Shri. Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri. Anand KanseFor Respondent: Shri. K. R. Subhash
Section 139(1)Section 143(1)Section 143(2)Section 143(3)Section 148Section 250Section 68

Post/Courier on the postal address. (2) On the facts and in law, the learned CIT(A) erred in confirming the addition of share application money of Rs. 3,84,00,000/- made u/s 68 of the Income Tax Act, 1961 on the basis of information received from the investigation wing ... were found by the learned AO. (3) On the facts and in law, the learned CIT(A) erred in confirming the addition of share application money of Rs. 3,84,00,000/- made u/s 68 of the Income Tax Act, 1961 on the basis of recorded statement of Shri Praveen

Kuber Grains & Spices Pvt. Ltd., Delhi vs. ACIT, Central Circle-30, New Delhi

In the result appeal of assessee vide ITR Nos

ITA 2711/DEL/2022[2015-16]Status: DisposedITAT Delhi03 Mar 2025AY 2015-16

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla

For Appellant: Shri Rajiv Khandelwal, CA &For Respondent: Shri Dayainder Singh Sidhu, CIT(DR)
Section 132Section 68

under Section 68 of the Act, and its affirmation by the Ld. CIT(A). The assessee had reportedly taken share application money of Rs. 5,90,00,000/- from one M/s Powmex Sales Pvt. Ltd., a Calcutta based company. The Ld. Counsel for the assessee submitted that order ... Kolkata. The Ld. AO had concluded that the said M/s Powmex Sales Pvt. Ltd. did not had sufficient creditworthiness qua the impugned share application money. He also held the view that the said company was a non-existent entity. Page 10 of 43 9. The Ld. Counsel for the assessee

Income Tax Officer-1(2), Indore vs. Divine Infracreation and Trading Private Limited, Mumbai

The appeal stands dismissed

ITA 272/IND/2024[2010-11]Status: DisposedITAT Indore28 Feb 2025AY 2010-11

Bench: Shri B.M. Biyani

Section 143(3)Section 144Section 148Section 68Section 68(1)

addition of Rs. 42,01,80,700~ made u/s 68 of the I.T. Act, 1961, when it was evident that the entire share application money including share premium money was received by the assessee company in A.Y. 2010-11 not in A.Y. 2011-12.” 6. We have heard the learned

Nu Pharmalogics Private Limited, Secunderabad vs. Income Tax Officer, Ward-16(2), Hyderabad

In the result, both the appeals in ITA

ITA 1165/HYD/2019[2011-12]Status: DisposedITAT Hyderabad28 Feb 2025AY 2011-12

Bench: Shri Vijay Pal Rao, Vice-A N D Shri Madhusudan Sawdiaआ.अपी.सं /Ita Nos.1165/Hyd/2019 & 302/Hyd/2017 (िनधा"रण वष"/Assessment Year: 2011-12 & 2012-13) Nu Pharmalogics (P) Ltd Vs. Income Tax Officer Hyderabad Ward-16(2) Pan:Aaccn2913J Hyderabad (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri P Murali Mohan Rao, Ca राज" व "ारा/Revenue By:: Shri Spg Mudaliar, Dr सुनवाई की तारीख/Date Of Hearing: 23/12/2024 घोषणा की तारीख/Pronouncement: 28/02/2025

For Appellant: Shri P Murali Mohan Rao, CAFor Respondent: : Shri SPG Mudaliar, DR
Section 143(2)

dismissed. 16. The assessee has challenged the addition made by the Assessing Officer u/s 68 of the I.T. Act, 1961 on account of share application money received from 3 companies namely, Everlink Commotrade Pvt. Ltd (Rs.50,00,000/-), K.D.K Food Grains Pvt. Ltd (Rs.61,50,000/-) and Manomay Foods Beverages ... information received from Investigation Wing, Mumbai. He has further contended that the assessee company is maintaining all the supporting evidence towards share application money received which were also placed in the paper book. However, the documents were not examined by the Assessing Officer regarding the identity of these companies

Nu Pharmalogics Private Limited, Hyderabad vs. ITO, Ward-16(1), Hyderabad

In the result, both the appeals in ITA

ITA 302/HYD/2017[2012-13]Status: DisposedITAT Hyderabad28 Feb 2025AY 2012-13

Bench: Shri Vijay Pal Rao, Vice- & Shri Madhusudan Sawdia

For Appellant: Shri P Murali Mohan Rao, CA
Section 143(3)Section 147Section 148

erred in upholding the addition of “| Rs.1,66,50,000/- made by the A.O, treating the share application money, share premium and share capital | _amounting to Rs. 1,66,50,000 as unexplained income of the | Rs.49,95,000 | | Appellant under section 68 of the Act, merely stating that ... share applicants and_genuineness of the transactions. '49. |The Ld. CIT (A) ought to have appreciated the fact that | _ appellant received share application money through banking | As Above _channels and banks statements in support of the same were Page 6 of 24 ITA Nos 1165 and 302 NU Pharmalogics

Deputy Commissioner of Income Tax, Chandigarh vs. Winsome Textile Industries Ltd, Chandigarh

ITA 556/CHANDI/2024[2011-12]Status: DisposedITAT Chandigarh27 Feb 2025AY 2011-12
For Respondent: The DCIT
Section 115JSection 143(1)Section 143(3)Section 147Section 148

आयकर अपीलीय अधिकरण, चण्डीगढ़ न्यायपीठ “बी”, चण्डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: PHYSICAL

Winsome Textile Industries Limited, Chandigarh vs. Asstt. Commissioner of Income Tax, Circle-4(1), Chandigarh

In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed

ITA 528/CHANDI/2024[2011-12]Status: DisposedITAT Chandigarh27 Feb 2025AY 2011-12

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Tejmohan Singh, AdvocateFor Respondent: Shri Ved Parkash Kalia Sr. DR
Section 115JSection 143(1)Section 143(3)Section 147Section 148

section 68 of Income-tax Act, 1961? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the department is free

Blueview Agencies Pvt. Ltd., Odisha vs. I.T.O., Ward - 5(3), Kolkata

The appeal of the assessee is allowed for statistical purposes

ITA 2510/KOL/2024[2009-2010]Status: DisposedITAT Kolkata27 Feb 2025AY 2009-2010

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.2510/Kol/2024 Assessment Year: 2009-10 Blueview Agencies Pvt. Ltd. .……………………………………..….……….Appellant Lamtibahal, Brajrajnagar, Jharsuguda – 768216, Odisha. [Pan: Aadcb6386Q] Vs. Ito, Ward-5(1), Kolkata….……..............................……........……...…..…..Respondent Appearances By: None Appeared On Behalf Of The Assessee. Shri Madanappa Raghuvir, Cit- Dr, Appeared On Behalf Of The Revenue. Date Of Concluding The Hearing : February 26, 2025 Date Of Pronouncing The Order : February 27, 2025 Order Per Sonjoy Sarma: The Present Appeal Has Been Preferred By The Assessee Against An Order Dated 04.10.2024 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. Brief Facts Of The Case Are That The Assessee Filed Its Return For The Assessment Year 2009-10 By Declaring Total Income Of Rs.1,890/-. The Return Of The Assessee Was Processed U/S 143(1) Of The Act. The Assessee Derives Its Income From Share Dealing & Investments. The Assessing Officer On Examination Of The Balance Sheet & Profit & Loss Account Of The Assessee Found That Certain Expenses Which Were Disallowable Has Not Been Disallowed & Certain Income Did Not Disclose In Its Return. Therefore, The Assessing Officer Issued Notice U/S 148 & Subsequently, An Order U/S 147/143(3) Of The Act Was Passed By Determining Total Income Of Rs.27,650/-. Later On, The Ld. Cit, Kolkata-Ii Found That Requisite & Proper Enquiries Were Not Concluded Regarding The Identity

Section 142(1)Section 143(1)Section 147Section 148Section 14ASection 250Section 250(6)Section 263

before the Assessing Officer. Accordingly, the Assessing Officer on the basis of materials available on record found that in the issue of share application money with high premium, the assessee could not explain properly. Accordingly, the share application money of Rs.7,85,50,000/- was added to the total income