PER HARI OM MARATHA, JM:- This appeal of the assessee for the assessment year 2003-04 is directed against the order of the ld. CIT(A) dated 03-01-2013.

2.1 Following grounds have been raised in this appeal. 1. On the facts and in the circumstances of the case, the ld. CIT(A) has grossly erred in upholding the reopening of assessment proceedings u/s 148 of the I.T. Act , 1961 thus the consequent orders passed u/s 148/143(3) deserves to be held bad in law.

1.1 The ld. CIT(A) has further erred in upholding the initiation of the proceedings u/s 148 of the I.T. Act, 1961 without at all verifying the subjective satisfaction based on the appreciation of the evidence in the possession of the ld. AO 2 who has simply proceeded with the borrowed satisfaction on the information provided by some other official without in any manner recorded his own independent satisfaction, thus the consequent order passed deserves to be held bad in law.

2. On the facts and in the circumstances of the case, the ld. CIT(A) has grossly erred in upholding the addition of Rs. 4,50,000/- made on account of share capital received by considering the same as unexplained without properly considering the submissions made, evidences adduced and the legal position in respect of to the credits on account of share capital being received from private limited companies and has further erred in ignoring the effective compliance made by the assessee under the Companies Act, 1956 thus the entire addition so made deserves to be deleted in toto.

3. The ld. CIT(A) has grossly erred in ignoring the binding decision of the Honble Supreme Court in the case of M/s. Lovely Exports (P) Ltd. reported in 216 CTR 195 squarely applicable as the assessee has filed the necessary confirmation and other particulars of share holders and incidentally all the subscribers are Private Limited Companies and the appellant had received the application money through banking channel, thus the consequent addition deserves to be deleted.

4. That the appellant craves the right to add, delete, amend, or abandon any of the grounds of appeal either before or at the time of hearing of appeal.

2.2 Briefly stated, the facts of the case are that the assessee company filed its return of income for the assessment year 2003-04 on 2-12-2003 declaring total income of Rs. 6,068/-. Subsequently, it was noticed that this company is one of the beneficiaries of the entry provided by various bogus entry providers located in New Delhi. It was found that the assessee has availed two entries provided by M/s. Weal Iron & Steel Co. (P) Ltd., New Delhi for 3 Rs. 2.00 lacs taken through its bank account no. 3318 and M/s. CITO Garments (P) Ltd., New Delhi for Rs. 2.50 lacs through its bank account no.

3324. This amounts have been credited in assessees bank account No. CA 252352 with Bank of Baroda, Kishore Niwas, Tripolia Bazar, Jaipur. As per record, the assessee may have paid commission of Rs. 1125/- for arranging these entries. Consequently, the AO proceeded u/s 147 of the Act read with Section 148 of the Act and issued a notice u/s 148 of the Act on 25-03-2010 which was duly served on the assessee on 25-03-2010 itself. The assessee complied with the notice stating that the return of income already filed u/s 139(1) of the Act may be treated as return filed in compliance of this notice. When asked the AO supplied the copies of reasons recorded. The assessee objected to initiation of reassessment proceedings which was disposed off separately as per law. The case of assessee company is that it had received the amounts as share application money. However, the AO proceeded to verify the amounts which have been received totaling to Rs. 4.50 lacs as share application money. The submission of the assessee was considered. However, the AO was not satisfied and accordingly added the sum of Rs. 4,51,125/- as assessees unexplained income.

2.3 Aggrieved, the assessee filed an appeal and the ld. CIT(A) has given a part relief to the assessee by deleting the addition of Rs. 1,125/- made on account of commission paid. However, the addition of Rs. 4.50 lacs has been confirmed. 4

2.4 After considering the rival submissions, we have found that these are share application money. The assessee has provided complete addresses and Permanent Account Numbers (PANs) to the AO. The share application money cannot be taxed in the hands of the company in case the share applicants are identified and it is found that the share applicants are identified. Accordingly, in view of the decision of Honble Apex Court in the case of CIT vs. Lovely Exports (P) Ltd. , 216 CTR 195 and other decisions of this very Honble Jurisdictional High Court rendered in this case, we are of the considered that the impugned addition of Rs. 4.50 lacs is not called for and we order the deletion of addition sustained by the ld. CIT(A) and allow the appeal of the assessee.

3.0 In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 20-01-2014. Sd/- Sd/- (.N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMEBR Jaipur Dated: 20 th JAN 2014 *Mishra Copy forwarded to:- By Order

1. M/s. Secure Stock Finance Co. (P) Ltd., Jaipur

2. The ITO, Ward- 1 (3) Jaipur

3. The ld. CIT(A)

4. The DR

5. The Guard File (IT No.354/JP/13)

6. The CIT A.R. ITAT: JAIPUR 5 6 7