- (1.) THE present appeal is filed by the Department under Section 260A of the Income Tax Act, 1961 against the impugned order dated 30.06.2011 passed by Income Tax Appellate Tribunal, Agra in I.T.A. No. 273/Agr/2009 for the assessment year 2004 -05.
(2.) ON 25.03.2014, a coordinate Bench has admitted the appeal on the following substantial questions of law : (a) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in confirming the order of the CIT (A) deleting the addition of Rs.82,12,000/ - made by the A.O. by invoking the provisions of Section 68 of the Act on account of unexplained share application money and loans by ignoring the fact that the credit worthiness of the persons who deposited the share application money and advanced loans could not be proved before the A.O.? (b) Whether on the facts and in the circumstances of the case, the Tribunal and the CIT (A) are justified in law in not taking into consideration the material available on record such as bank account of the Directors, family member and their HUF which reveal that immediately prior to the issue of cheque to the assessee on account of share application money there were unverifiable cash deposits? (c) Whether on the facts and in the circumstances of the case, the Tribunal and CIT (A) are justified in law in not taking into consideration the fact that unsecured loans have been advanced to the assessee by those persons who were having annual income in the range of Rs.40,000/ - as per the Ration Card?
(3.) THE brief facts of the case are that the assessee is a private limited company and derives the income from cold storage, which was constructed and installed during the year itself. During the course of assessment proceedings u/s 143(3) of the Act, the assessee was required to furnish details of investment in the cold storage, source of share capital and genuineness of loans. The assessee has filed some details, but did not file the complete documentary evidence as required by the A.O., so the A.O. has made the addition under Section 68 of the Act. Both the Appellate Authorities have deleted the said addition. Being aggrieved, the Department has filed the present appeal. With this background Shri R.K. Upadhyay, the learned counsel for the appellant -Department has justified the order passed by the A.O. He submits that on scrutiny of the documents, it was noticed that share applicants and loan creditors are mainly agriculturists and their main source of income is agriculture and their annual income is in the range of Rs. 40,000/ - per annum. Almost all have family consisting 4 to 6 persons. Out of such income, it is not possible to save an amount after meeting house hold expenses and other expenses. He further submits that in the bank account, the cash was deposited after issuing the cheques for share application. The depositors were not having the capacity to invest the money, infact, it is unaccounted money of the assessee, which was shown in the name of agriculturists. He also submits that the agriculturists have claimed that they kept the cash in their houses for long period, though they were maintaining bank accounts. He submits that it is unbelievable story. Lastly, he justified the addition made by the A.O.;