HIGH COURT OF MADHYA PRADESH, JABALPUR Income Tax Appeal No.91/2014 Commissioner of Income Tax, Bhopal Versus People's International & Service Pvt. Ltd. Bhopal Income Tax Appeal No.92/2014 Commissioner of Income Tax, Bhopal Versus People's International & Service Pvt. Ltd. Bhopal Income Tax Appeal No.94/2014 Commissioner of Income Tax, Bhopal Versus People's General Hospital Pvt. Ltd. Bhopal Income Tax Appeal No.95/2014 Commissioner of Income Tax, Bhopal Versus People's General Hospital Pvt. Ltd. Bhopal Present : Hon. Shri Justice Rajendra Menon Hon. Shri Justice Sanjay Yadav Shri Sanjay Lal, counsel for appellant. Whether approved for reporting: Yes/No. 2 I.T.A.No.91/2014 Commissioner of Income Tax Vs. People's International & Service ORDER (15.10.2014) As common question of law and facts are involved in these appeals, we propose to deal with matter and dispose of appeals by this common order. 2. Calling in question tenability of orders passed identical in nature by Income Tax Appellate Tribunal for different assessment years i.e., 2002-2003, 2004-2005, 2006-2007 & 2007- 2008 respectively, these four appeals have been filed under section 260-A of Income Tax Act, 1961. 3. For convenience facts are taken from I.T.A.No.91/2014 (CIT Vs. People's International & Service Pvt. Ltd.). 4. During assessment proceedings it was found that assessee had received investment in their share capital and credit from M/s Alliance Industries Ltd., Gibraltar and by holding that source of income of foreign investment is not explained and finding there to be no material to show as to how assessee received amount of investment in assessee establishment, assessing offi cer made certain additions in income by involving provisions of section 68 3 I.T.A.No.91/2014 Commissioner of Income Tax Vs. People's International & Service of Act. However, when matter travelled to Commissioner (Appeals) and then to appellate Tribunal, appellate authority found that as assessee had disclosed source of income i.e. income derived from foreign investment, no further enquiry is required from assessee and it is for department to verify source of income of foreign investor and if it is found doubtful enquiry should be conducted against foreign investor. 5. appellate authority after hearing all concerned found that for various other assessment years with regard to similar investment being made by various investors like M/s Alliance Industries Ltd., Gibraltar addition made under section 68 of Act were interfered with and orders passed by appellate authority have been upheld by High Court dismissing appeals filed by revenue by order dated 27.6.2013. 6. From para 3 of impugned order appellate tribunal had referred to orders passed in identical cases and in para 3.2 order passed by High Court, which reads as under is reproduced :- 13. By recording aforesaid fi ndings, Commissioner of Income Tax (Appeals) reversed order of Assessing Offi cer and directed 4 I.T.A.No.91/2014 Commissioner of Income Tax Vs. People's International & Service deletion of additions made in matter. ITAT affi rmed order of CIT(A) with similar reasoning. 14. In light of aforesaid factual position, legal position may be looked into because aforesaid factual position has not been disputed by parties. 15. In Lovely Export (supra) Apex Court considering question held thus : 2 Can amount of share money be regarded as undisclosed income under s.68 of IT Act, 1961 ? We fi nd no merit in this Special Leave Petition for simple reason that if share application money is received by assessee company from alleged bogus shareholders, whose names are given to A.O., then Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we fi nd no infi rmity with impugned judgment. 16. aforesaid judgment has been followed by all Courts and judgments relied on by appellants relates to period prior to judgment in Lovely Exports. As Apex Court has specifi cally held that if identity of person providing share application money is established then burden was not on assessee to prove creditworthiness of said person. However, department can proceed against said Company in accordance with law. position of present case is identical. It is not case of any of parties that M/s Alliance Industries Limited, Sharjah is bogus company or non- existent company and amount which was subscribed by said Company by way of share subscription was in fact money of respondent assessee. In present case, assessee had established identity of investor who had provided share subscription and it was established 5 I.T.A.No.91/2014 Commissioner of Income Tax Vs. People's International & Service that transaction was genuine though as per contention of respondent creditworthiness of creditor was also established. In present case, in light of judgment of Lovely Exports (P) Ltd., we have to see only in respect of establishment of identity of investor. Delhi High Court also in Divine Leasing & Finance Ltd. (supra), considering similar question held that assessee Company having received subscriptions to public/rights issue through banking channels and furnished complete details of shareholders, no addition could be made under section 68 in absence of any positive material or evidence to indicate that shareholders were benamidars or fi ctitious persons or that any part of share capital represented company's own income from undisclosed sources. similar view has been taken by other High Courts. 17. As Apex Court has considered law in Lovely Exports (supra) and in view of law laid down by Apex Court, we fi nd that substantial questions framed in these appeals do not arise for our consideration. Accordingly, all these appeals are dismissed with no order as to costs. 7. From aforesaid narration of facts it is clear that similar objections raised by revenue in matter of creditworthiness with regard to investment made by M/s Alliance Industries Ltd and similar objection of revenue have already been considered and rejected and following same, identical orders have been passed in this impugned orders also. 8. Considering fact that question 6 I.T.A.No.91/2014 Commissioner of Income Tax Vs. People's International & Service involved in these appeals has already been considered and rejected by Coordinate Bench of this Court, we see no reason to make any further indulgence in matter. 9. Accordingly, finding no substantial question of law made out warranting consideration in these appeals, same are dismissed. (Rajendra Menon) (Sanjay Yadav) Judge Judge M Commissioner of Income-tax, Bhopal v. People's International & Service Pvt. Ltd