CIT vs Lovely Exports (P) Ltd.

SUPREME COURT

CIT VS LOVELY EXPORTS (P) LTD.

Citation 216 CTR 195

Applied by ITO vs Orbital Communication (P) Ltd.

125 TTJ 484; Lex Reported

Followed by Midas Golden Distilleries (P) Ltd. vs CIT

124 TTJ 25

CIT vs GP International Ltd.

186 Taxman 229; 229 CTR 86

Topic Cash credits

Sub Topic Share application money

Summary

AY 1984-85 to AY 1986-87. The assessee had given details of the subscribing share applicants. In case the Department alleged that applicants were bogus, it was free to proceed against the applicants. The share application money received could not be regarded as undisclosed income of the assessee company. S.68 of the Income Tax Act 1961

Special Leave to Appeal No. 11993 of 2007

S. H. Kapadia and B. Sudershan Reddy, JJ

11 January 2008

V. Shekhar with Chinmoy Pradip Sharma and B.V. Balaram Das for the Petitioner

ORDER

By The Court :

Delay condoned.

2. Can the amount of share money be regarded as undisclosed income under s. 68 of IT Act, 1961 ? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgment.

3. Subject to the above, Special Leave Petition is dismissed.

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