- (1.) THE present appeal has been filed under section 260(A) of the Income Tax Act, 1961 (hereinafter referred to as the Act) against the order dt. 19 -6 -2009 passed by the Income Tax Appellate Tribunal, New Delhi (hereinafter referred to as the Tribunal). The Commissioner of Income Tax, Meerut had proposed the following substantial question of law said to be arising out of the order of the Tribunal: - -been shown can be accepted as 'person' under the IT Act and the share capital introduced by such persons under the garb of share capital money can be accepted? (II) Whether on the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal has erred in ignoring the provisions of section 68 of the IT. Act, 1961 by upholding the order of Commissioner (Appeals) despite the fact that identity of the alleged shareholders, genuineness of the transaction and creditworthiness of share applications were not proved at all? (III) Whether the Ld. ITAT was justified in ignoring the decision of Hon'ble Jurisdictional High Court in the case of Ram Lal Aggarwal v. CIT : (2006) 9 (I) ITCL 195 (All -HC): (2006) 280 ITR 547 (All), whereas the decision was binding being of jurisdictional High Court and the ratio was fully applicable to the case under consideration? (IV) Whether the ITAT was justified in relying on the obiter dicta of the Supreme Court in Lovely Exports : (2009) 319 ITR 5 (SC) : : (2008) 216 CTR 195 (SC) while the ratio of the same did not at all apply in case of the assessee to exclusion of the jurisdictional High Courts judgment reported in : (2006) 9 (I) ITCL 195 (All -HC): (2006) 280 ITR 547 (All). (V) Whether the ITAT was justified in relying on the Supreme Court judgment in the case of CIT v. Lovely Exports : (2009) 319 ITR 5 (SC) : (2008) 216 CTR 195 (SC) in which it was clearly held that the department was free to proceed to reopen the assessment of alleged shareholders whereas in the present case the alleged share holders were agriculturist, not existing in the income tax records, hence, the question of reopening the individual assessment did not arise?
(2.) BRIEFLY stated, the facts giving rise to the appeal are as follows: - The appeal relates to the assessment year 2005 -06. During the assessment year in question, an addition of Rs. 24,50,000 on account of share application money received from the shareholders has been made by the Assessing Authority on the ground that the respondent assessee has failed to prove genuineness of transactions and creditworthiness of the shareholders. The Assessing Officer has found that the shareholders have shown low income in the income tax returns which was much less compared to investment in share capital. In Appeal, the CIT deleted the observation that in case of capital contributed by a shareholder, the identity of the shareholder is only required to be proved. While holding so, the Commissioner of Income Tax relied upon decision of Hon'ble Supreme Court in the case of CIT v. Steller Investment Ltd. : (2001) 251 ITR 263 and also CIT v. Lovely Exports (P.) Ltd., (2009) 319 ITR 5(SC) : : (2008) 216 CTR 195 (SC). The appeal preferred by the Revenue before the Tribunal failed.
(3.) WE have heard Sri Dhananjay Awasthi, learned Senior Standing Counsel for the appellant and have perused the three orders passed by the authorities, including that by the Tribunal and find that the matter is squarely covered by the decision of Hon'ble Supreme Court in the case of Steller Investment Ltd. (supra). That being the position, we are of the considered opinion that the order passed by the Tribunal does not suffer from any legal infirmity. The appeal fails and is dismissed.;