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| The Tax Publishers2019 TaxPub(DT) 1735 (Del-Trib) : (2019) 176 ITD 0409 INCOME TAX ACT, 1961
Section 68
Since assessee had duly discharged initial onus cast on it to prove identity and creditworthiness of share applicants along with genuineness of receipt of share applications money, therefore, AO was not justified in making addition under section 68 merely relying on Inspector's report, especially in view of the fact that notices served under section 133(6) stood duly served and replied.
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Income from undisclosed sources - Addition under section 68 - Receipt of share capital - Addition on the basis of Inspector's report
Assessee-company received share application money. AO, on the strength of Inspector's report concluded that investor companies did not exist at the given address and accordingly, AO held share application money was unexplained credit under section 68.Held: Assessee had furnished list of share applicants with full names and addresses. To cross verify genuineness of the share application money received, AO issued notices under section 133(6). Reply to all the notices were received by AO along with ledger account, bank statements and copies of income-tax returns of investors. Thus, initial onus cast upon assessee to prove identity and creditworthiness of investors and genuineness of transaction of receipt of share application money. Accordingly, no addition could be made under section 68.
Relied: CIT v. Lovely Exports (P.) Ltd. (2008) 216 CTR 195 (SC) : 2009 TaxPub(DT) 0261 (SC) and CIT v. Sophia Finance Ltd. (1994) 205 ITR 98 (Del) : 1994 TaxPub(DT) 0556 (Del-HC). Distinguished:CIt v. Navodaya Castle (P) Ltd. (2014) 367 ITR 306 (Del) : 2014 TaxPub(DT) 3789 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
IN THE ITAT, DELHI 'E' BENCH
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