INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Receipt of share capital - Non-production of directors of subscriber companies

Assessee-company claimed to have received share capital along with premium AO treated the same as unexplained credit under section 68 on the ground of assessee's failure to produce directors of subscriber companies. Held: Investing companies were regularly filing income-tax returns and were properly registered with RoC. No instance of any cash deposit in bank accounts of investing company was pointed out and investment had been made through banking channel. Assessee could at most request directors of investor companies to appear before AO, but had no power to compel them to do so. Thus, it was for department to enforce their attendance and on failure to take action against them as per law. Thus, it could not be a valid ground for making addition under section 68 as identity and creditworthiness of share subscribers and genuineness of receipt of share capital stood established.

Relied:CIT v. Orchid Industries (P) Ltd. (2017) 88 Taxmann.com 502 : 2017 TaxPub(DT) 1911 (Bom-HC). Distinguished:CIT v. Navodaya Castle Pvt. Ltd. (2014) 367 ITR 306 (Del) : 2014 TaxPub(DT) 3789 (Del-HC) (SLP dismissed by Hon'ble Supreme Court), DRB Exports (P) Ltd. v. CIT (2018) 93 Taxmann.com 490 (Cal.) : 2018 TaxPub(DT) 2724 (Cal-HC), CIT v. Nipun Builders & Developers (P) Ltd., 30 Taxmann.com 292 : 2013 TaxPub(DT) 0526 (Del-HC), CIT v. Nova Promoters & Finlease(P) Ltd., 18 Taxmann.com 217 : 2012 TaxPub(DT) 1558 (Del-HC), CIT v. Ultra Modern Exports (P) Ltd., 40 Taxmann.com 458 : 2013 TaxPub(DT) 0917 (Del-HC), CIT v. Frostair (P) Ltd. 26 taxmann.com 11 : 2012 TaxPub(DT) 3185 (Del-HC), CIT v. NR Portfolio Pvt. Ltd., 42 taxamann.com 339 : 2014 TaxPub(DT) 0501 (Del-HC), CIT v. Empire Builtech (P) Ltd., 366 ITR 110 : 2014 TaxPub(DT) 1850 (Del-HC), CIT v. Focus Exports (P) Ltd. 51 taxmann.com 46 (Del.) : 2014 TaxPub(DT) 4283 (Del-HC), Pr. CIT v. Bikram Singh (ITA No. 55/2017)(Del) : 2017 TaxPub(DT) 3937 (Del-HC) and Pr. CIT v. NDR Promoters Pvt. Ltd. [ITA No. 49/2018)(Delhi] : 2019 TaxPub(DT) 0886 (Del-HC).

REFERRED : CIT v. Lovely Exports (P.) Ltd. (2008) 216 CTR 195 (SC) : 2009 TaxPub(DT) 261 (SC), Asstt. CIT v. Shyam Indus Power Solutions (P.) Ltd. (2018) 90 taxmann.com 424 (Del - Trib.) : 2018 TaxPub(DT) 1040 (Del-Trib), ) CIT v. Kamdhenu Steel &. Alloys Ltd. (2014) 361 ITR 220/19 Taxmann.com 26 (Del) : 2012 TaxPub(DT) 1644 (Del-HC), CIT v. Winstral Petrochemicals (P.) Ltd. (2011) 10 Taxmann.com 137 (Delhi) : 2011 TaxPub(DT) 0259 (Del-HC), CIT v. Gangour Investment Ltd. (2009) 18 DTR (Del) 242: (2009) 179 Taxman 1 (Del) : 2009 TaxPub(DT) 1400 (Del-HC), CIT v. Kamna Medical Centre (P.) Ltd. (2013) 35 Taxmann.com 470 (All), CIT v. Miq Steels (P.) Ltd. (2013) 36 taxmann.com 422 (All) : 2013 TaxPub(DT) 2548 (All-HC), CIT v. Gagandeep Infrastructure (P.) Ltd. (2017) 80 Taxmann.com 272 (Bombay) : 2017 TaxPub(DT) 1238 (Bom-HC), Dy. CIT v. RCP Infratech (P.) Ltd. (2018) 95 Taxmann.com 163 (Raipur-Trib), Asstt. CIT v. Venkateshwar Ispat (P.) Ltd. (2009) 319 ITR 393 (Chhattisgarh) : 2009 TaxPub(DT) 1706 (Chhattisgarh-HC), CIT v. Misra Preservers (P.) Ltd. (2013) 31 Taxmann.com 214 (Allahabad) : 2013 TaxPub(DT) 0376 (All-HC), Agrawal Coal Corporation (P.) Ltd. v. Addl. CIT (2012) 19 Taxmann.com 209 (Ind) : 2012 TaxPub(DT) 0375 (Ind-Trib), Asstt. CIT v. AMR Hospitality Services Ltd. (2013) 40 Taxmann.com 96 (Hyd-Trib) : 2013 TaxPub(DT) 2309 (Hyd-Trib), CIT v. Peoples General Hospital Ltd. (2013) 35 Taxmann.com 444 (Madhya Pradesh) : 2013 TaxPub(DT) 1865 (MP-HC), CIT v. Peoples General Hospital Ltd. (2013) 35 taxmann.com 444 (Madhya Pradesh) : 2013 TaxPub(DT) 1865 (MP-HC), CIT v. Down Town Hospitals (P) Ltd. (2004) 267 ITR 439 (Gau) : 2004 TaxPub(DT) 1223 (Gau-HC) and CIT v. Creative World Telefilms Ltd. (2011) 333 ITR 100 (Bom.) : 2011 TaxPub(DT) 0096 (Bom-HC).

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