S.68: Cash credits-Share application money-Onus- Pvt. Company-Burden is on assessee-On facts the addition
was confirmed. Reassessment was held to be valid. (S.131, 143(1), 147)
The Assessing Officer on the basis of report of investigation Wing of the department the assessment was reopened under section 147,which was completed under section 143(1) of the Act on the ground that the alleged share application money was mere accommodation entries. All the notices were come back. It was contended that the registered offices of the company could be found in the website www.mca.gov.inand the assessing officer may visit the site for further verification. The Assessing Officer has not accepted the submission and made addition under section 68 and also commission of 2.5% on the said amount. In appeal Commissioner (Appeals) following the ruling of Supreme Court in CIT v. Lovely Exports (P) Ltd (2008) 216 CTR 195, (2009) 319 ITR (St.) 5 (SC) held that the addition was not justified. Revenue appeal was dismissed by the Tribunal. On appeal to High Court the Court held that there is no onus on the Assessing Officer to visit website for address of share application for verification, onus on assessee to proven genuineness. Mere furnishing of bank statements of share applications is not sufficient to prove the creditworthiness. Failure to furnish report of investigation wing does not affect validity of addition. On facts and on reassessment the appeal of revenue was allowed and the addition made by the assessing Officer was confirmed. (A.Y. 2004-05)
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