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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

The ACIT, Central Circle-3, Vadodara vs. M/S. Aikya Chemicals Pvt. Ltd., Vadodara

In the result, both the appeals of the Revenue are hereby dismissed

ITA 160/AHD/2021[2015-16]Status: DisposedITAT Ahmedabad01 Oct 2024AY 2015-16

Bench: Ms. Suchitra Kamble, Judical Member & Shri Narendra Prasad Sinhaआयकर अपील (एसएस) सं./I.T (Ss).A. No. 81/Ahd/2021 ("नधा"रण वष" / Assessment Years : 2014-15) बनाम/ Asstt. Commissioner Of M/S. Cube Mines & Income-Tax Minerals Pvt. Ltd. Vs. Central Circle-3, Vadodara 11/C Ground Floor, Jaishri Narayan Co-Operative Hsg. Society, Subhanpura, Gorwa, Vadodara, Gujarat 390015 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaccc5761D (Appellant) .. (Respondent) & आयकर अपील (एसएस) सं./I.T (Ss).A. No. 82/Ahd/2021 ("नधा"रण वष" / Assessment Years : 2014-15) & आयकर अपील सं./I.T.A. No. 159/Ahd/2021 ("नधा"रण वष" / Assessment Years : 2015-16) बनाम/ Asstt. Commissioner Of M/S. Iolite Cube Income-Tax Inframaterial Ltd. Vs. Central Circle-3, Vadodara 1, Chandamani Nagar, Vidhya Vihar School Lane, Subhanpura, Vadodara, "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aacci5944A (Appellant) .. (Respondent) &

For Appellant: Shri Jigar Adhiyaru, A.RFor Respondent: Shri H. Phani Raju, CIT. DR
Section 132Section 153A

same amount – once on issue of shares in A.Y.2011-12 and again in A.Y.2014-15 on sale of shares that were acquired out of share application money. The addition in respect of unsecured loan made in the hands of the borrowers was the third addition for the same amount

The ACIT, Central Circle-3, Vadodara vs. M/S. Iolite Cube Inframaterial Ltd., Vadodara

In the result, both the appeals of the Revenue are hereby dismissed

ITA 159/AHD/2021[2015-16]Status: DisposedITAT Ahmedabad01 Oct 2024AY 2015-16

Bench: Ms. Suchitra Kamble, Judical Member & Shri Narendra Prasad Sinhaआयकर अपील (एसएस) सं./I.T (Ss).A. No. 81/Ahd/2021 ("नधा"रण वष" / Assessment Years : 2014-15) बनाम/ Asstt. Commissioner Of M/S. Cube Mines & Income-Tax Minerals Pvt. Ltd. Vs. Central Circle-3, Vadodara 11/C Ground Floor, Jaishri Narayan Co-Operative Hsg. Society, Subhanpura, Gorwa, Vadodara, Gujarat 390015 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaccc5761D (Appellant) .. (Respondent) & आयकर अपील (एसएस) सं./I.T (Ss).A. No. 82/Ahd/2021 ("नधा"रण वष" / Assessment Years : 2014-15) & आयकर अपील सं./I.T.A. No. 159/Ahd/2021 ("नधा"रण वष" / Assessment Years : 2015-16) बनाम/ Asstt. Commissioner Of M/S. Iolite Cube Income-Tax Inframaterial Ltd. Vs. Central Circle-3, Vadodara 1, Chandamani Nagar, Vidhya Vihar School Lane, Subhanpura, Vadodara, "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aacci5944A (Appellant) .. (Respondent) &

For Appellant: Shri Jigar Adhiyaru, A.RFor Respondent: Shri H. Phani Raju, CIT. DR
Section 132Section 153A

same amount – once on issue of shares in A.Y.2011-12 and again in A.Y.2014-15 on sale of shares that were acquired out of share application money. The addition in respect of unsecured loan made in the hands of the borrowers was the third addition for the same amount

Asstt. Commissioner of Income Tax, Range-V, Lucknow vs. Patel PAN Products Ltd., Lucknow

In the result, the appeal filed by the revenue is allowed

ITA 736/LKW/2017[2009-10]Status: DisposedITAT Lucknow30 Sept 2024AY 2009-10

Bench: Shri Gd Padmahshali & Shri Subhash Malguriaassessment Year: 2009-10 Acit, Range-V M/S. Patel Pan Products V. Aayakar Bhawan, Ashok Marg, Ltd. Lucknow-226001. 37-38, Gaurabagh, Kursi Road, Lucknow-226002. Pan: Adypa2513M (Appellant) (Respondent) C. O. No. 09/Lkw/2019 (In Arising Out Of Ita. No. 736/Lkw/2017) Assessment Year: 2009-10 M/S. Patel Pan Products Ltd. V. Acit, Range-V 37-38, Gaurabagh, Kursi Road, Aayakar Bhawan, Ashok Lucknow-226002. Marg, Lucknow-226001. Pan:Aaecp0472C (Appellant) (Respondent) Appellant By: Shri P. K. Kappor, Ca Respondent By: Shri Manu Chaurasia, Cit(Dr) Date Of Hearing: 10 07 2024 Date Of Pronouncement: 30 09 2024 O R D E R

For Appellant: Shri P. K. Kappor, CAFor Respondent: Shri Manu Chaurasia, CIT(DR)
Section 132ASection 133ASection 142(1)Section 143(2)Section 275(2)Section 43BSection 68

been received as share security premium from CO. No.09/LKW/2019 Page 3 of 13 different persons. In addition share application money amounting to Rs.1,50,200/- has also been received by the assessee during the year. According to notice u/s 142(1) of the Act, the queries were made from ... copy of ITR of the concerns parties were not filed. According to the Ld. DR, the assessee received of Rs.28,00,000/- towards share application money comprising to subscription to share capital and share premium from may share applicants. In this regard, the assessee has not furnished the details/relevant documents