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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

DCIT, Circle, Najibabad vs. Parmarth Industries Pvt. Ltd., Bijnore

In the result, the appeal of the revenue is allowed for statistical purpose

ITA 5529/DEL/2017[2009-10]Status: DisposedITAT Delhi17 Jan 2024AY 2009-10

Bench: Sh. N. K. Billaiya & Sh. Yogesh Kumar U.S.Assessment Year: 2009-10 Dcit Circle Vs. Parmarth Industries Pvt. Ltd., 10Th, Km Stone, Nagina Najibabad, Bijnor Uttar Pradesh Road, Bijnor, Bijnor Uttar Pradesh Pan No.Aadcp0551D (Appellant) (Respondent) Appellant By Sh. V.K. Dubey, Sr. Dr Respondent By Sh. Mayank Patawari, Ca Sh. Anmol Jagga, Advocate Date Of Hearing: 15/01/2024 Date Of Pronouncement: 15/01/2024

Section 147Section 68

case in deleting the addition of Rs. 1,00,00,000/- on account of unexplained deposits with regard to amount of share application money ignoring the fact that assessee has not provided any details in respect of such sum during the assessment proceedings. 3. That the order ... lacs and share premium of Rs. 1.44 crores totaling to Rs. 1.50 crores. The second addition was of Rs.1 crore being share application money received during the year. 4. Both the additions were made on a categorical finding that the assessee grossly failed in discharging the initial onus cast upon

ITO, Ward-20(1), New Delhi vs. Placid Buildwell P.Ltd, New Delhi

In the result, the appeal of the Revenue in ITA No

ITA 6744/DEL/2018[ 2009-10]Status: DisposedITAT Delhi16 Jan 2024

Bench: Shri N.K. Billaiya & Shri Yogesh Kumar U.S

For Appellant: Shri Ved Jain, AdvFor Respondent: Shri Prakash Nath Baranwal, CIT- DR
Section 143(3)Section 147Section 148

assessment order of Luminous Infrastructure Pvt Ltd for A.Y 2009-10 framed u/s 143(3)/147 of the Act wherein the share application money received by M/s Luminous Infrastructure Pvt Ltd has been accepted after thorough scrutiny. 19. M/s Luminous Infrastructure Pvt Ltd has invested in shares of the assessee

Strides Shasun Ltd, Navi Mumbai vs. DCIT Cir 15(3)(2), Mumbai

In the result, appeal of assessee is partly allowed

ITA 932/MUM/2017[2012-13]Status: DisposedITAT Mumbai15 Jan 2024AY 2012-13

Bench: Shri Vikas Awasthy& Shri Amarjit Singhआअसं.932 /मुं/2017 (िन.व. 2012-13) Strides Pharma Science Limited [Formerly Known As Strides Arcolab Limited/ Strides Shasun Limited] 201, Devavrata, Sector -17, Vashi, Navi Mumbai – 400 703 Pan: Aadcs-8104-P ...... अपीलाथ"/Appellant बनाम Vs. The Deputy Commissioner Of Income Tax Circle – 15(3)(2), Mumbai Room No.451, 4Th Floor, Aaykar Bhavan, M.K.Road, Mumbai – 400 020 ..... "ितवादी/Respondent अपीलाथ" "ारा/ Appellant By : Shri Nitesh Joshi, Advocate With Shri Ninand Patade "ितवादी "ारा/Respondent By : Shri Anoop Hiwase सुनवाई क" ितिथ/ Date Of Hearing : 26/10/2023 घोषणा क" ितिथ/ Date Of Pronouncement : 15 /01/2024 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Final Assessment Order Dated 23/01/2017 Passed U/S. 143(3) R.W.S. 144C(13) Of The Income Tax Act, 1961 [In Short ‘The Act’], For The Assessment Year 2012-13. 2. The Assessee In Appeal Has Raised As Many As 12 Grounds. Shri Nitesh Joshi, Advocate Appearing On Behalf Of The Assessee Submitted At The Outset

For Appellant: Shri Nitesh Joshi, Advocate with Shri Ninand PatadeFor Respondent: Shri Anoop Hiwase
Section 143(3)

allowed assessee’s primary contention, the alternate contentions raised by the assessee in ground No.2 are not deliberated upon. Ground No.3: Interest on share application money pending allotment – Rs.13,03,61,705/-. 9. The ld.Counsel for the assessee submitted that the assessee had invested in Share Application Money of Agila ... travelled to the Tribunal in all the Assessment Years. The Tribunal has been taking consistent view and deleted the adjustment of interest on share application money. The ld.Counsel for the assessee asserted that the facts in the impugned assessment year are identical and the investment has been made in share

Strides Shasun Ltd, Navi Mumbai vs. DCIT Cir 15(3)(2), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 7400/MUM/2017[2013-14]Status: DisposedITAT Mumbai15 Jan 2024AY 2013-14

Bench: Shri Vikas Awasthy& Shri Amarjit Singhआअसं.7400 /मुं/2017 (िन.व. 2013-14) Strides Pharma Science Limited [Formerly Known As Strides Arcolab Limited/ Strides Shasun Limited] 201, Devavrata, Sector -17, Vashi, Navi Mumbai – 400 703 Pan: Aadcs-8104-P ...... अपीलाथ"/Appellant बनाम Vs. The Deputy Commissioner Of Income Tax Circle – 15(3)(2), Mumbai Room No.451, 4Th Floor, Aaykar Bhavan, M.K.Road, Mumbai – 400 020 ..... "ितवादी/Respondent अपीलाथ" "ारा/ Appellant By : Shri Nitesh Joshi, Advocate With Shri Ninand Patade "ितवादी "ारा/Respondent By : Shri Anoop Hiwase & Dr. Samuel Pitta सुनवाई क" ितिथ/ Date Of Hearing : 30/10/2023 घोषणा क" ितिथ/ Date Of Pronouncement : 15/01/2024 /01/2024 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Final Assessment Order Dated 30/10/2017 Passed U/S. 143(3) R.W.S. 144C(13) Of The Income Tax Act, 1961 [In Short ‘The Act’], For The Assessment Year 2013-14. 2 2. The Assessee In Appeal Has Raised Ten Grounds Of Appeal. The Assessee Has Also Raised Additional Grounds Of Appeal Vide Application Dated 26/10/2023. 3. The Ground No.1 Of Appeal Is General In Nature, Hence, Require No Separate Adjudication.

For Appellant: Shri Nitesh Joshi, Advocate with Shri Ninand PatadeFor Respondent: Shri Anoop Hiwase &
Section 143(3)Section 36(1)(va)

general in nature, hence, require no separate adjudication. 4. In ground No.2 of appeal, the assessee has assailed charging of interest on share application money pending allotment. Shri Nitesh Joshi appearing on behalf of the assessee submitted that the issue raised in ground No.2 is identical to the issue raised ... assessee in Assessment Year 2012-13. 6. We find that the action of Transfer Pricing Officer (TPO) in charging interest on share application money pending allotment by re-characterizing investment as loan is recurring. In assesee’s appeal ITA No.932/Mum/2017 for Assessment Year 2012-13 similar issue was decided

M/S. Trinity Global Enterprises Ltd., Jaipur vs. ITO, New Delhi

In the result, the appeal of the assessee is allowed

ITA 2122/DEL/2016[2011-12]Status: DisposedITAT Delhi12 Jan 2024AY 2011-12

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. Rajkumar Gupta, CA &For Respondent: Sh. Subhra J. Chakraborty, CIT-DR
Section 133(6)Section 142(1)Section 40A(2)(b)Section 68

paid to others without assigning any reason for allowing only 30% of total expenditure claimed by the assessee.” 2 Trinity Global Enterprises Ltd. Share Application Money: Excerpts taken from the Assessing Officer: 3. During the assessment proceedings, the Assessing Officer observed that the assessee had issued 1500000 shares of Rs.10 ... subscribed any share capital in the assessee company. Further, the assessee has submitted the following details/evidences to prove the receipt of the share application money to the revenue authorities which have not been rebut or found to be confuted: 6 Trinity Global Enterprises Ltd. Share Application Money

DCIT, Circle-2(1), Hyderabad vs. Kmc Constructions Limited, Hyderabad

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

ITA 32/HYD/2017[2011-12]Status: DisposedITAT Hyderabad11 Jan 2024AY 2011-12

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Chary

For Appellant: Shri S. Rama Rao, ARFor Respondent: Shri K. Madhusudan, CIT-DR
Section 145(3)

diverted funds cannot be allowed. Learned Assessing Officer found that the assessee made investments in the subsidiaries in the shape of share application money to the tune of Rs. 75,86,88,669/- and also advanced certain interest free loans to the sister concerns. In respect of investments, he invoked

Kmc Contructions Limited, Hyderabad vs. Addl. CIT, Range-2, Hyderabad

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

ITA 1734/HYD/2016[2011-12]Status: DisposedITAT Hyderabad11 Jan 2024AY 2011-12

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Chary

For Appellant: Shri S. Rama Rao, ARFor Respondent: Shri K. Madhusudan, CIT-DR
Section 145(3)

diverted funds cannot be allowed. Learned Assessing Officer found that the assessee made investments in the subsidiaries in the shape of share application money to the tune of Rs. 75,86,88,669/- and also advanced certain interest free loans to the sister concerns. In respect of investments, he invoked

Akik Marketing India Pvt Ltd, New Delhi vs. ITO Ward - 2(1), New Delhi

ITA 4559/DEL/2019[2010-11]Status: DisposedITAT Delhi11 Jan 2024AY 2010-11

Bench: Shri M. Balaganesh & Shri Anubhav Sharmaassessment Year : 2010-11 Akik Marketing India Pvt. Ltd. Vs. Ito, N-39, Ground Floor, Ward 2(1), Greater Kailash-I, New Delhi New Delhi-110048 Pan : Aaaca6579K (Appellant) (Respondent) Assessee By : Shri Gurjeet Singh, Ca & Shri Shantanu Jain, Adv. Revenue By : Shri Kanav Bali, Sr. Dr

For Appellant: Shri Gurjeet Singh, CA &For Respondent: Shri Kanav Bali, Sr. DR
Section 147Section 68

assessed at Rs. 3,91,31,450/-. 2.1 The Ld. AO made additions amounting to Rs. 3,78,68,000/- on account of Share application money u/s 68 and Rs. 7,57,360/- on account of Commission Charges. Aggrieved with the said addition, appellant filed appeal before ... year 2010-11. The above amounts are just only accommodation entries in lieu of giving cash and taking checks in the form of share application money /share capital/Premium /share forfeiture/exempt long-term capital gain/loss short term capital gain/loss /advance against property/unsecured loans/transfer of company/bogus sale/bogus purchase etc.” 4559/Del/2019

Deepsikha Vinimay (P) Ltd., Kolkata vs. ITO, WD- 6(1), Kolkata

In the result the appeal of the assessee is allowed

ITA 904/KOL/2023[2009-10]Status: DisposedITAT Kolkata09 Jan 2024AY 2009-10

Bench: Shri Sanjay Garg & Shri Rajesh Kumar

Section 133(6)Section 142(1)Section 143(3)Section 144Section 144BSection 147Section 263Section 68

involved in this appeal. Both the Commissioner of Income Tax (Appeal) and the Tribunal below have in details considered the fact that the share application money was paid by account payee cheque, the creditor appeared before the Assessing Officer, disclosed its PAN number and also other details of the accounts

ACIT, Central Circle-26, Delhi vs. Zed Enterprises P Ltd., Delhi

In the result, the appeals of the Revenue as well as the Cross Objections of the assessee are dismissed

ITA 212/DEL/2022[2016-17]Status: DisposedITAT Delhi09 Jan 2024AY 2016-17

Bench: Sh. Challa Nagendra Prasaddr. B. R. R. Kumar

For Appellant: Ms. Shilpi Jain, CAFor Respondent: Sh. P.N. Barnwal, CIT-DR
Section 143(3)Section 153CSection 68

both on facts and in law in holding that the assessee is involved in providing and taking accommodation entries in the form of share application money or unsecured loans.” 4. The assessee is a Private Limited company and is engaged in the business of trading. The assessee filed return

ACIT, Central Circle-26, Delhi vs. Zed Enterprises P Ltd., Delhi

In the result, the appeals of the Revenue as well as the Cross Objections of the assessee are dismissed

ITA 211/DEL/2022[2015-16]Status: DisposedITAT Delhi09 Jan 2024AY 2015-16

Bench: Sh. Challa Nagendra Prasaddr. B. R. R. Kumar

For Appellant: Ms. Shilpi Jain, CAFor Respondent: Sh. P.N. Barnwal, CIT-DR
Section 143(3)Section 153CSection 68

both on facts and in law in holding that the assessee is involved in providing and taking accommodation entries in the form of share application money or unsecured loans.” 4. The assessee is a Private Limited company and is engaged in the business of trading. The assessee filed return

ACIT, Central Circle-26, Delhi vs. Zed Enterprises P Ltd., Delhi

In the result, the appeals of the Revenue as well as the Cross Objections of the assessee are dismissed

ITA 209/DEL/2022[2013-14]Status: DisposedITAT Delhi09 Jan 2024AY 2013-14

Bench: Sh. Challa Nagendra Prasaddr. B. R. R. Kumar

For Appellant: Ms. Shilpi Jain, CAFor Respondent: Sh. P.N. Barnwal, CIT-DR
Section 143(3)Section 153CSection 68

both on facts and in law in holding that the assessee is involved in providing and taking accommodation entries in the form of share application money or unsecured loans.” 4. The assessee is a Private Limited company and is engaged in the business of trading. The assessee filed return

ACIT, Central Circle-26, Delhi vs. Zed Enterprises P Ltd., Delhi

In the result, the appeals of the Revenue as well as the Cross Objections of the assessee are dismissed

ITA 208/DEL/2022[2012-13]Status: DisposedITAT Delhi09 Jan 2024AY 2012-13

Bench: Sh. Challa Nagendra Prasaddr. B. R. R. Kumar

For Appellant: Ms. Shilpi Jain, CAFor Respondent: Sh. P.N. Barnwal, CIT-DR
Section 143(3)Section 153CSection 68

both on facts and in law in holding that the assessee is involved in providing and taking accommodation entries in the form of share application money or unsecured loans.” 4. The assessee is a Private Limited company and is engaged in the business of trading. The assessee filed return

M/S. Delighted Holdings (P) Ltd., Kolkata vs. Dcir, Cir-8(2), Kolkata

In the result, the appeal of the assessee is allowed

ITA 624/KOL/2023[2011-12]Status: DisposedITAT Kolkata08 Jan 2024AY 2011-12

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma]

Section 143(1)Section 147Section 148

taxation. In the present case, the amount in question was neither a loan or the deposit , it was also not on account of share application money, the said 15 I.T.A. No. 624/Kol/2023 Assessment Year: 2011-12 M/s Delighted Holdings Pvt. Ltd. amount was on account of sale of investment therefore

Dy. Commissioner of Income Tax, Circle-16(2), Hyderabad vs. Ms Agarwal Foundries Private Limited, Hyderabad

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

ITA 1063/HYD/2017[2012-13]Status: DisposedITAT Hyderabad05 Jan 2024AY 2012-13

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumarassessment Year: 2012-13 Dy.Cit Vs. M/S. M.S Agarwal Circle 16(2) Foundries (P) Ltd, Hyderabad Hyderabad Pan:Aaics4832K (Appellant) (Respondent) Revenue By: Shri K. Madhusudan, Cit(Dr) Assessee By: Shri Sunil Kumar Jain, Ca Date Of Hearing: 04/01/2024 Date Of Pronouncement: 05/01/2024 Order Per Laliet Kumar, J.M This Appeal Filed By The Revenue Is Directed Against The Order Dated 23.03.2017 Of The Learned Cit (A)-4, Hyderabad Relating To A.Y.2012-13. 2. Facts Of The Case, In Brief, Are That The Assessee Company Is Engaged In Manufacture Of Sponge Iron. It Filed Its Return Of Income For The A.Y 2012-13 Admitting Income Of Rs.5,730/- & Also Revised Return Of Income Admitting Income Of Rs.9,760/-. Subsequently, The Case Was Converted Into Scrutiny Under Cass & Statutory Notices U/S 143(2) & 142(1) Of The I.T. Act, 1961 Were Issued & Served On The Assessee To Which Page 1 Of 10

For Appellant: Shri Sunil Kumar Jain, CAFor Respondent: Shri K. Madhusudan, CIT(DR)
Section 143(2)

case and in law, the CIT(A) erred in deleting the Addition made on amount of Unexplained Cash Credits in the form of share application money of Rs. 18,65,00,000/- introduced in the name of M/s Kamal Fashions Pvt. Ltd. 3. On the facts and in the circumstances ... erred by not enhancing the addition made on amount of Unexplained Cash Credits in the form of share application money of M/s Kamal Fashions Pvt. Ltd., by Rs. 22,55,00,000/- which is the remaining amount of share application money introduced in the name of M/s Kamal Fashions

DCIT, Central Circle-1, Gurugram vs. Platinum Towers P.Ltd, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 1307/DEL/2020[2013-14]Status: DisposedITAT Delhi05 Jan 2024AY 2013-14

Bench: Sh. C. N. Prasaddr. B. R. R. Kumar

For Appellant: Sh. Parikshit Agarwal, CAFor Respondent: Sh. Vivek Vardhan, Sr. DR
Section 132Section 153ASection 269SSection 271D

wherein the Hon'ble High Court had the occasion to decide on the fact that once the share application money is treated as an undisclosed income of the assessee us 68 of the Act, whether the initiation of proceedings u/s 269SS r.w.s 271D of the Act is valid

Trident Towers Pvt. Ltd., New Delhi vs. ACIT, Central Circle-30, New Delhi

In the result, both the appeals of the assessee are partly allowed

ITA 323/DEL/2019[2011-12]Status: DisposedITAT Delhi05 Jan 2024AY 2011-12

Bench: Shri M. Balaganesh & Shri Anubhav Sharma

For Appellant: Shri P. C. Yadav, AdvFor Respondent: Shri Anuja Garg, Sr. DR
Section 147Section 68

Kuber Group of cases οι 09.10.2014. During search and post search proceedings, information relating to entities providinį accommodation entries of share application money, share premium, share capital and unsecure( loans to Kuber group entities came to light. As per information gathered it was found that during

Creative Realmart Pvt. Ltd., Jaipur vs. ITO, Ward-3(5), Jaipur

ITA 599/JPR/2023[2013-14]Status: DisposedITAT Jaipur04 Jan 2024AY 2013-14
For Appellant: Sh. P.C. Parwal (CA)For Respondent: Sh. A.S. Nehra (Addl.CIT)
Section 133ASection 143(1)Section 144Section 147Section 148Section 68

cannot be any, dispute on the fundamental legal position that the onus is on the assessee to prove 'bonafides' or 'genuineness' of the share application money credited in his books of accounts. This approach finds support from the scheme of Section 68, which provides that where any sum is found ... concerned, one need only to remain confined to the narrow issue of onus on the assessee to prove 'bonafides' or 'genuineness' of the share application money credited in his books of accounts, and that is the call needs to be taken in the light of facts available on record

Iris Clothings Ltd, Howrah vs. DCIT, Circle-11(1), Kolkata

In the result the appeal of the assessee is allowed

ITA 1015/KOL/2023[2013-14]Status: HeardITAT Kolkata02 Jan 2024AY 2013-14

Bench: Shri Sanjay Garg & Shri Rajesh Kumar

Section 133(6)Section 143(3)Section 68

involved in this appeal. Both the Commissioner of Income Tax (Appeal) and the Tribunal below have in details considered the fact that the share application money was paid by account payee cheque, the creditor appeared before the Assessing Officer, disclosed its PAN number and also other details of the accounts

M/S Jayganga Exim India (P) Ltd., Kolkata vs. DCIT, Circle-II, Bhopal

ITA 28/IND/2022[2012-13]Status: DisposedITAT Indore02 Jan 2024AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2012-13 M/S. Jayganga Exim India Pvt. Dy. Cit, Limited Central-Ii, [Formerly Known As ‘Jay Jyoti Bhopal (India) Pvt. Ltd.’] बनाम/ 26, Col. Biswas Road, Ground Floor, Vs. West Side Flat, Kolkata (Assessee / Appellant) (Revenue / Respondent) Pan: Aaacj 8822 E Assessee By Shri Harsh Vijaywargiya, Ca Revenue By Ms. Simran Bhullar, Cit Dr Date Of Hearing 21.11.2023 Date Of Pronouncement 02.01.2024

Section 144Section 147Section 37Section 68

आयकर अपीलीय अिधकरण, इंदौर "ायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO