The Assessee must prove the genuineness of share capital under Section 68 of the Income Tax Act, and the court will not interfere with factual findings unless a substantial question of law is involved.

( 1 ) PRESENT appeal under Section 260a of the Income Tax Act, 1961 (for short as 'act') has been filed by the Revenue against the order dated 17th November, 2006 passed by the Income Tax Appellate Tribunal (for short as 'tribunal'), New delhi in ITA No. 1700/del/2003 for the assessment year 1995-96.

( 2 ) THE Assessee is a public limited company and is carrying on the business in finance, investments and leasing. While completing the assessment under Section 143 (3) of the Act, the Assessing Officer noted that the Assessee had raised share capital to Rs. 75 lacs by a public issue made on 23rd January, 1995. In the public issue, 7,50,000/- equity shares were offered to the public at the face value of Rs. 10 per share. The promoters of the company made a private contribution of Rs. 2,25,05,000/ -. The Assessee was called upon to prove the genuineness of the share capital. The Assessee adduced evidence in support of his claim. The Assessing Officer came to the conclusion that out of the total share contribution of Rs. 3,00,05,000/-, the Assessee could establish the genuineness of only Rs. 1,41,69,865/- and in respect of the balance of rs. 1,58,35,135/- the Assessee could not discharge the onus to prove genuineness of the investment and as such he treated the amount as Assessee's income from undisclosed sources.

( 3 ) ON appeal, the Commissioner of Income Tax (Appeals) sustained the addition of Rs. 25,24,000/- out of the addition of Rs. 1,58,35,135/- made by the assessing Officer which consists of following amounts:- (i ) Contribution by 17 persons to whom Rs . 2,30,000/-

summons were issued by the A. O.

which were returned unserved

(ii) Contribution by 66 persons on whom

Rs. 22,94,000/-

summons were served but from whom

no reply was received

Total Rs. 25,24,000/-

( 4 ) ORDER of the Commissioner of Income Tax (Appeals) was challenged by the assessee before the Tribunal. The Tribunal vide its impugned order deleted the addition of Rs. 25,24,000/ -. Hence the present appeal.

( 5 ) IT has been contended by the learned counsel for the Revenue that as per Section 68 of the Act, onus is on the Assessee to establish the identity of the subscribers of the shares and the alleged investors were not existing at the given address and thus the Assessee has failed to discharge the onus which was upon him and has failed to prove the creditworthiness and genuineness of the transaction.

( 6 ) THE Tribunal after considering the evidence as well as submissions of the parties, decided the matter in favour of the Assessee and against the revenue holding that:-

"we are of the view that so far as the share contribution of Rs. 25,24,000/- is concerned, the Assessee has discharged its onus to prove the same under Section 68 of the Act. The complete list containing the folio number, names and addresses of the applicants and the total number of shares applied for is contained in pages 10 to 25 of the paper book. The details of the allotment containing such details as the bank code/serial number, applicants' number and name, the number of shares applied for and allotted, the folio number, the distinct numbers of the shares allotted, the share certificate number, the application amount, the amount adjusted against allotment and the amount refundable or payable etc. All these details regarding the entire 7,50,000 shares have been furnished. Pages 34 to 75 contain the statements received by the Assessee from the banks containing the total summary of the amounts collected on behalf of the Assessee. Page 34 is a letter written by the Delhi stock Exchange Association Limited on 21. 2. 1995 to the Assessee approving the scheme of allotment sent to the Assessee. Pages 76 to 142 contain the postal receipts for the dispatch of the share certificate to all the allottees of the shares. There is no finding that any of the shares allotted have been returned to the Assessee. Thus, copious details about the public issue have been f