“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

Anjani Logistics Private Limited, Vapi vs. Income Tax Officer, Ward - 1, Vapi

In the result, the grounds of appeal raised by the assessee are allowed

ITA 384/SRT/2023[2009-10]Status: DisposedITAT Surat05 Jul 2023AY 2009-10

Bench: Shri Pawan Singh(Physical Hearing) Anjani Logistics Private Limited, I.T.O., 301,302 Shree Jalaram Complex, Nr. Ward-1, Vs. Development Credit Bank, Vapi- Vapi. 396191, Gujarat. Pan No. Aahca 8368 H Appellant/ Assessee Respondent/ Revenue

Section 142(1)Section 143(1)Section 144Section 147Section 148Section 254(1)

erred in confirming the action of assessing officer in making an addition of Rs. 5,00,000/- on account of alleged bogus share application money. 3. It is, therefore, prayed that above addition made by the assessing officer and confirmed by CIT(A) may please be deleted. Anjani Logistics ... name of one of the Director Mrs Bhanuja Anil Agarwal. It was stated on behalf of assessee that they have not received any share application money and further there is no entry in the bank account of Director during the F.Y. 2008-09. No material was provided by the Assessing

Assistant Commissioner of Income-Tax, Circle-1(1), Raipur (Cg) vs. M/S Vandana Vidyut Limited, Raipur (Cg)

In the result, appeal of the revenue is allowed for statistical purposes in terms of our aforesaid observations

ITA 138/BIL/2017[2013-14]Status: DisposedITAT Raipur03 Jul 2023AY 2013-14

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No.138/Rpr/2017 "नधा"रण वष" / Assessment Year : 2013-14 The Assistant Commissioner Of Income Tax, Circle-1(1), Raipur (C.G.) .......अपीलाथ" / Appellant बनाम / V/S. M/S. Vandana Vidyut Limited Vandana Building, M.G Road, Jawahar Nagar, Raipur (C.G.) Pan : Aaacv7850L ……""यथ" / Respondent

For Appellant: NoneFor Respondent: Shri V.K Singh, CIT-DR

Section 143(3)Section 14ASection 14A(2)Section 250(4)Section 68

undisclosed income under section 68 of the Act ? Answering the above question, the hon'ble Supreme Court has held that if the share application money is received by the assessee-company from alleged 10 ACIT, Circle-1(1), Raipur. Vs. M/s. Vandana Vidyut Limited bogus shareholders, whose names are given ... 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

ACIT C.C. -13, Cent. RG.-3, Mumbai vs. M/S. Krishiraj Trading Ltd (Now Mergeed With Mgn Agro Properties Pvt. Ltyd, Mumbai

ITA 2219/MUM/2021[2012-13]Status: DisposedITAT Mumbai30 Jun 2023AY 2012-13

For Appellant: Shri Farrokh Irani, Sr. AdvocateFor Respondent: Shri Neehar Ranjan Pandey

Section 142(1)Section 143(3)Section 14ASection 68

informed that the lender had received ICDs of INR 75 Crores from Adani Enterprises Ltd. Further, the Lender had received refund of the share application money of INR 25 Crores from International Synthfab Private Limited. It was also pointed out the loan of INR 100.25 Crores received by the Assessee ... source of funds of the Lender being ICDs INR 75 Crores received by Lender from Adani Enterprises Limited and refund of share application money INR 25 Crores received by the Lender from International Synthfab Private Limited. Further, the Assessee had 6 also filed following documents before the Assessing Officer/CIT

Tata Aig General Insurance Comapany Ltd, Mumbai vs. Asst CIT 2(3), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3512/MUM/2015[2009-10]Status: DisposedITAT Mumbai30 Jun 2023AY 2009-10

For Appellant: Shri Percy Pardiwala/Shri NishantFor Respondent: Shri Samuel Pitta (Sr. AR)

Section 143Section 143(3)Section 144Section 144C(3)Section 15Section 153Section 2Section 32Section 92C

Nature Para no. of TPO Amount No. 1 Interest on delayed export receivable Para 7.4 Rs. 1,40,01,089/- 2 Interest on Share Application money Para 7.5 Rs. 61,00,91,759/- 3 Guarantee commission Para 7.8 Rs. 3,38,05,864/- Total

Vardhman Infrafab Pvt. Ltd., New Delhi vs. Ward-26(1), New Delhi

In the result, ground No. 7 and 8 of assessee are allowed

ITA 277/DEL/2022[2011-12]Status: DisposedITAT Delhi30 Jun 2023AY 2011-12

Bench: Shri C.M. Gargvardhman Infrafab Pvt. Ltd, Vs. Ito, K43, Green Pak (Man), Delhi Ward-26(1), New Delhi (Appellant) (Respondent) Pan: Aaccv5663K Assessee By : Shri Priyansh Jain, Ca Revenue By: Shri Om Parkash, Sr. Dr Date Of Hearing 06/04/2023 Date Of Pronouncement 30/06/2023

For Appellant: Shri Priyansh Jain, CAFor Respondent: Shri Om Parkash, Sr. DR

Section 234BSection 68

judgment of Hon'ble Supreme Court in case of PCIT Vs. NRA (supra) I note that this case pertains transaction of share capita/ share application money which is not applicable in the facts and circumstances of the present case having distinguish and dissimilar factual position. Therefore, I respectfully note that

Kreteka Investments Private Limited, Mumbai vs. Income Tax Officer, Ward-12(3)(1), Mumbai

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

ITA 902/MUM/2023[2012-2013]Status: DisposedITAT Mumbai28 Jun 2023AY 2012-2013

Bench: Shri Prashant Maharishi, Am & Shri N. K. Choudhry, Jm

For Appellant: Sh. K. GopalFor Respondent: Sh. S.N. Kabra, Sr.DR

Section 147Section 250Section 68

147/148 of the Act. The assessee claimed before the AO that that it had received an amount of Rs. 60,00,000/- as share application money during the year, from M/s Vanquish Investment & Leasing Pvt. Ltd. through banking channel, which was refunded back during the year itself and the assessee

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

ITA 1992/MUM/2016[2011-12]Status: DisposedITAT Mumbai28 Jun 2023AY 2011-12

Bench: Shri Kuldip Singh & Ms. Padmavathy Sassessment Year: 2011-12

For Appellant: Shri Ninad Patade, A.RFor Respondent: Shri Manoj Kumar, CIT D.R

Section 143Section 144C(1)Section 14ASection 92C

grossly erred in making adjustment u/s. 92CA of the Act aggregating to Rs. 17,36,13,067/- with respect to imputing interest on share application money pending allotment. 2:0 Re: Imputing additional interest on the share application money paid the subsidiaries by the Appellant ... Assessing Officer / Transfer Pricing Officer / Dispute Resolution Panel have erred in imputing additional interest on the share application money paid to the subsidiaries by the Appellant. 2:2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the Assessing Officer/Transfer

Midway Motors \Private Limited, Cuttack vs. Pr.CIT-1, Bhubaneswar

In the result, appeal of the assessee stands allowed

ITA 148/CTK/2023[2017-18]Status: DisposedITAT Cuttack28 Jun 2023AY 2017-18

Bench: Shri George Mathan & Shri Rajesh Kumarआयकर अऩीऱ सं/Ita No.148/Ctk/2023 (ननधाारण वषा / Assessment Year : 2017-2018) Midway Motors Private Limited, Vs Pr.Cit, Bhubaneswar-1 Plot No.554, Nuapada Chaak, Madhupatna, Cuttack-753010 Pan No. :Aajcm 8153 E (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) .. ननधााररती की ओर से /Assessee By : Shri Sunil Mishra, Advocate राजस्व की ओर से /Revenue By : Shri M.K.Gautam, Pr.Cit(Osd) सुनवाई की तारीख / Date Of Hearing : 28/06/2023 घोषणा की तारीख/Date Of Pronouncement : 28/06/2023 आदेश / O R D E R Per Bench : This Is An Appeal Filed By The Assessee Against The Order Of The Ld. Pr.Cit, Bhubaneswar-1, Dated 11.01.2022, Passed In Itba/Rev/F/Rev5/2021-22/1038622483(1), For The Assessment Year 2017-2018. 2. It Was Submitted By The Ld. Ar That There Is Delay Of 411 Days In Filing The Present Appeal, Which Was Due To Death Of The Accountant Of The Assessee, Who Was Looking After The Tax Matters Of The Assessee. The Affidavit Filed By The Assessee Has Not Been Found To Be False & The Reasons Given Are Found To Be Reasonable. Consequently, The Delay Of 411 Days In Filing The Appeal Is Condoned & Appeal Of The Assessee Is Disposed Off On Merits.

For Appellant: Shri Sunil Mishra, AdvocateFor Respondent: Shri M.K.Gautam, Pr.CIT(OSD)

Section 142(1)Section 143(3)Section 263

which the assessee had responded by replying on 27.01.2021. it was the submission that the ld. Pr.CIT had raised the issue of the share application money received by the assessee to an extent of Rs.6 crores which was mistakenly shown under the head unsecured loans. The second issue raised ... expenses claimed to an extent of Rs.3,59,30,793/-. It was the submission that the assessee had responded to the issue of share application money pending allotment which was shown under the head unsecured loans wherein it was specifically mentioned that the share application money was shown as Rs.6

Aj Energy Private Limited, Delhi vs. ITO, Ward-1(1), Delhi

In the result, the appeal of the Assessee is allowed for statistical purposes

ITA 1190/DEL/2022[2011-12]Status: DisposedITAT Delhi28 Jun 2023AY 2011-12

Bench: Shri Kul Bharat & Shri M. Balaganesh

For Appellant: Shri Ved Jain, AdvFor Respondent: Shri Manvendra Goel, CIT(DR)

Section 142(3)Section 143(3)Section 147Section 68Section 69C

erred both on facts and in law in confirming the addition of Rs. 13,22,10,000/- made by AO on account of share application money treating the same as unexplained credits invoking the provisions of section 68 of the Act. (ii) That the said addition has been confirmed ignoring ... order under Section 263 of the Act. Sequitur is that the Assessing Officer could not have made an addition on account of share application money in the assessment proceedings under Section 147/148. Accordingly, the assessment order is not erroneous. Thus, the Commissioner of Income Tax could not have exercised jurisdiction

ITO, Ward-18(3), New Delhi vs. Norm Consultants Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is allowed

ITA 1008/DEL/2021[2002-03]Status: FixedITAT Delhi28 Jun 2023AY 2002-03

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

For Appellant: NoneFor Respondent: Sh. Arvind Kr. Bansal, Sr. DR

Section 139Section 142Section 143Section 143(2)Section 148Section 2Section 68

addition of Rs.4,00,00,000/- made by the AO u/s 68 of the Income Tax Act, 1961 on account of unexplained share application money and share premium. 2. Whether on the facts and circumstances of the case, the ld. CIT(A) erred in holding in para

Turner & Townsend Pvt. Ltd., New Delhi vs. ACIT, Circle- 25(2), New Delhi

In the result, Appeal of the assessee is allowed

ITA 8763/DEL/2019[2012-13]Status: DisposedITAT Delhi28 Jun 2023AY 2012-13

Bench: Shri Anil Chaturvedi & Shri Yogesh Kumar U.S.

For Appellant: Department by: Shri Mrinal Kumar, Sr. DFor Respondent: Shri Mrinal Kumar, Sr. D

Section 139(1)Section 143(2)Section 143(3)Section 144C

Reimbursement of expenses to AE in connection with services performed 4 Receipt of Share Application Money No 2,20,00,000 benchmarking 5 Reimbursement of expenses to AE 1,04,71,698 required Abbreviation used: TNMM - Transactional Net Margin Method (ii) In order to justify that the above said transactions ... documents / information furnished by the Appellant, the Ld. TPO examined the economic analysis undertaken, and accepted the international transactions involving receipt of share application money and reimbursement of expenses to Associated Enterprise "AE" to be at arm's length. (vii) However, with respect to the international transaction involving professional Services

Edge Infrabuild Pvt. Ltd., New Delhi vs. DCIT Circle-8(1), New Delhi

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

ITA 5136/DEL/2019[2010-11]Status: DisposedITAT Delhi28 Jun 2023AY 2010-11

Section 143(2)Section 147Section 68

remitting it to various companies of the beneficiary Page 4 of 11 Edge Infrabuild Pvt. Ltd. vs. DCIT group in the form of share application money, share capital and/or unsecured loan. ii) He used to accept cheques of one set of companies of beneficiary group to the bank accounts

Ai-Yaseen Trading Co.P.Ltd, Meerut vs. ITO, Ward-1(1), Meerut

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

ITA 6244/DEL/2017[2013-14]Status: DisposedITAT Delhi28 Jun 2023AY 2013-14

Section 56(2)(vii)Section 56(2)(viib)

making addition of Rs.48,45,000/- U/s 56(2)(viib) of the Income Tax Act, 1961 ignoring the fact that the Share Application money pending allotment was received in F.Y.2010-11, which ought to be deleted and CIT(A) also in error in confirming the same. 2. That the assessee ... live buffalo. During the year under consideration, the assessee company issued 5000 shares at premium Rs.980/- per share to certain investors. Factually, the share application money has been received from the following five share holders in Financial Year: 2010-11: Page 2 of 9 M/s AI-Yaseen Trading

Broom Publications Pvt. Ltd., Faridabad vs. ITO Ward 1(2), Faridabad

In the result, the appeal of the assessee on this ground is allowed

ITA 6177/DEL/2019[2015-16]Status: DisposedITAT Delhi27 Jun 2023AY 2015-16

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Rajeev Saxena, AdvFor Respondent: Sh. Kanv Bali, Sr. DR

Section 14Section 2Section 56Section 56(2)(viib)Section 68

Heard the arguments of both the parties and perused the material available on record. 7. The AO made addition of the entire share application money of Rs.94,00,000/- u/s 68 of the Income Tax Act, 1961 based on the bank statements and lack of creditworthiness of the applicant parties

Balgopal Cold Storages Pvt. Ltd., Faridabad vs. ITO Ward 1(2), Faridabad

In the result, the appeal of the assessee on this ground is allowed

ITA 6176/DEL/2019[2015-16]Status: DisposedITAT Delhi27 Jun 2023AY 2015-16

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Rajeev Saxena, AdvFor Respondent: Sh. Kanv Bali, Sr. DR

Section 14Section 2Section 56Section 56(2)(viib)Section 68

Srg Exim P. Ltd., Kolkata vs. Dy CIT -CC-4(2), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 668/MUM/2021[2010-11]Status: DisposedITAT Mumbai23 Jun 2023AY 2010-11

Bench: Shri B.R. Baskaran & Shri Rahul Chaudhary

For Appellant: Shri Mani JainFor Respondent: Dr. Mahesh Akhade

Section 132Section 143(3)Section 153ASection 68

said years under section 143(3) read with section 153A of the Act. In the years under consideration, the assessing officer added the share application money received by the assessee as income of the assessee u/s 68 of the Act holding them to be accommodation entries. The details of share ... under the category of unabated assessment years. We notice that the additions made by the AO in these years are related to the Share Application money received by the assessee, which were added u/s 68 of the Act. It is not the case of the revenue that these additions have