Commissioner Of Income Tax Ii, Ludhiana v. M/S Shree Dadu Auto (P)Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No.704 of 2009Date of decision 30 .3.2010 Commissioner of Income Tax II, Ludhiana... Appellant Versus M/s Shree Dadu Auto (P)Ltd. ... Respondent. CORAM:HON'BLE MR. JUSTICE M.M. KUMARHON'BLE MR. JUSTICE JITENDRA CHAUHAN Present:Mr. Vivek Sethi,Advocate for the appellant 1.To be referred to the Reporter or not ? 2.Whether the judgement should be reported in the Digest ? M.M.KUMAR, J. The Revenue has approached this Court under Section 260A ofthe Income Tax Act, 1961 (for brevity 'the Act') challenging order dated26.2.2009 (P.3) passed by the Income Tax Appellate Tribunal, ChandigarhBench “B”,Chandigarh (for brevity 'the Tribunal') in ITA No.558/CHD/2008 in respect of the assessment year 2005-06. The Tribunal onthe basis of the judgements of Hon'ble the Supreme Court rendered in thecases of CITv. Lovely Exports Pvt. Ltd.(2008)216 CTR (SC) 195 and CITv. M/s Divine Leasing and Finance Ltd.(2008) TIOL -118 SC IT has heldthat when the identity of the share applicant and share holder is disclosedthen no addition can be made under Section 68 of the Act in the hands ofthe assessee- respondent firm especially when the assessee had received theimpugned amount in the form of share application money which was dulyconfirmed by the share applicant. From the order of the CIT(A) it is clearthat both the companies M/s AFSL and M/s ACSL have made investment in ITA 704 of 2009 the share application money in the company of the assessee- respondent.Both the companies have been assessed to tax and the investment made bythem has been disclosed in their respective balance sheets. It is in theaforesaid facts and circumstances that the Tribunal reached the conclusionthat no addition under Section 68 of the Act could have been made and theAssessing Officer could have resorted to reopening the individualassessment of the share applicants /share holders holders applicants as hasbeen held by Hon'ble the Supreme Court in the aforesaid judgements. Having heard learned counsel for the Revenue, we are of theconsidered view that no exception is provided to admit the appeal especiallywhen the view of Hon'ble the Supreme Court in various judgements isabsolutely clear. The proper course for the Assessing Officer could havebeen to re-open the assessment of the share applicants/ share holders ratherthan making addition against the assessee- respondent. There is thus nomerit in the appeal. Dismissed. (M.M.Kumar) Judge 30.3.2010okg (Jitendra Chauhan)Judge