COMMISSIONER OF INCOME TAX Vs. VICTOR ELECTRODES LTD.

JUDGEMENT

(1.) This appeal is directed against the order of Income Tax Appellate Tribunal, whereby the appeal filed by the Revenue, being ITA No. 2173/Del/2008 against the order of the Commissioner of Income Tax (Appeals) in respect of the Assessment Year 2002-03 was dismissed.

(2.) The Assessee company filed return of income tax declaring total income of Rs. 8,67,334/- for the Assessment Year 2002-03. The assessment, initially framed under Section 143(3) of Income Tax Act (hereinafter referred to as 'the Act'), was re-opened by issuing notice under Section 148 of the Act. During the course of assessment, it was noticed by the Assessing Officer that the assessee had received Share Application Money, amounting to Rs. 27 lakhs from four private limited companies. On being called upon to prove the genuineness of the receipts, the assessee furnished documents such as Share Application Money, copies of resolution by the Board of Directors of the applicant companies, as well as the bank statements, Memorandums & Articles of Association and Income Tax Return of these companies. The applicant could not produce the parties before the Assessing Officer. He accordingly added the Share Application Money as unexplained cash credit under Section 68 of the Act.

(3.) The Commissioner of Income Tax (Appeals), however, was of the view that since all the applicants were assessed to income tax and the investments made by them was reflected in their respective balance sheets, the genuineness of the payment made by them to the assessee company had prima facie been proved. He noted that the Assessing Officer did not make any enquiry from the concerned parties nor did he examine their assessment record. He, therefore, deleted the addition made by the Assessing Officer.