The Pr. CIT vs. M/s. Realvalue Realtors (P.) Ltd.; [ITA No. 4836/Mum/2011; Date of order: 30th June, 2016; A.Y.: 2007-08; Mum. ITAT] Section 68 – Cash credit (share capital) – Substantial part share application money was received in earlier assessment year and, thus, it could not be added in impugned A.Y. – Addition deleted

13. The Pr. CIT vs. M/s. Realvalue Realtors (P.) Ltd. [Income tax Appeal
No. 957 of 2017] Date of order: 4^th November, 2019 (Bombay High Court)

The Pr. CIT vs. M/s. Realvalue Realtors (P.) Ltd.; [ITA No.
4836/Mum/2011; Date of order: 30^th June, 2016; A.Y.: 2007-08; Mum.
ITAT]

Section 68 – Cash credit (share capital) – Substantial part share
application money was received in earlier assessment year and, thus, it could
not be added in impugned A.Y. – Addition deleted

The assessee company is engaged in the business of dealing in property
and trading in shares and stocks. The AO, during the assessment proceedings,
noted that in the relevant previous year the assessee had received an amount
from one Mr. Mushtaq Ahmed Vakil as share application money. The assessee
company had allotted 24,21,788 shares to him. The AO held that the assessee had
failed to discharge the onus of establishing the genuineness of the transaction
and the creditworthiness of the shareholder and added an amount of Rs.
8,12,44,700 as income from other sources.

The assessee filed an appeal before the CIT(A). The CIT(A) called for a
remand report from the AO. The Commissioner, after going through this remand
report, concluded that out of the total share application money of Rs.
8,12,44,700, an amount of Rs. 5,18,44,700 was received in the A.Y. 2006-07 and
could not be added in the impugned assessment year. Accordingly, the
Commissioner directed the AO to take necessary action if required. In respect
of the remaining amount of Rs. 2.94 crores, the Commissioner observed that
sufficient evidence was produced in respect of the identity and genuineness of
the share application money and of Mr. Vakil and accordingly deleted the said
addition.

Being aggrieved by the order of the CIT(A), the Revenue filed an appeal
to the Tribunal. The Tribunal upheld the order as regards Rs. 5,18,44,700 not
pertaining to the relevant assessment year. As regards the amount of Rs. 2.94
crores, the Tribunal set aside that part of the order of the Commissioner and
remanded the matter to the AO to examine the genuineness of the investment of
Rs. 2.94 crores by Mr. Vakil. Accordingly, the appeal was partly allowed by the
impugned order.

Aggrieved by the order of the ITAT, the Revenue went before the High
Court. The Court found that as far as the amount of Rs. 5,18,44,700 was
concerned, both the Commissioner (Appeals) and the Tribunal had, after
considering the records, categorically held that this amount was relevant for
the A.Y. 2006-07. In fact, the AO in his remand report dated 16^th
September, 2010 had accepted this position. As regards the amount of Rs. 2.94
crores, the Tribunal has sent the same for verification by the AO. The
contentions of the parties regarding this amount about its genuineness, etc.
would be considered on remand. In the circumstances, the appeal was dismissed.