The Tax Publishers2019 TaxPub(DT) 3200 (Kol-Trib)

INCOME TAX ACT, 1961

Section 68

Where assessee had discharged its onus to prove the identity, creditworthienss and genuineness of the share applicants, thereafter the onus shifted to AO to disprove the documents furnished by assessee as such, addition under section 68 simply made by AO without any enquiry and investigation, was to be deleted.

Income from undisclosed sources - Addition under section 68 - Alleged unexplained share capital and premium thereon - Burden of proof discharged by assessee

Assessee was formed with an authorized share capital was to the tune of Rs. 25 lakhs. And on examination of the balance sheet by the AO it revealed that as on 31-3-2012 the assessee had received an amount of Rs. 1,78,20,000 as premium on share subscribed by three private limited companies. Thus the assessing officer noted that the total investment credited in the balance sheet on this count accounted to Rs. 1.80 crores inclusive of the face value of the shares. AO acknowledged that he got responses to letters under section 133(6), wherein the share subscribers confirmed the transaction and certain documents were also filed like PAN, ITR copy, balance sheet, etc. Taking note that the assessee failed to produce the directors of the share subscribing companies was pleased to take adverse view against them and made the addition of the entire share capital and premium as income of the assessee under section 68. CIT(A) confirmed the same. Held: In the facts of the present case, both the nature and source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO's record. Accordingly, all the three conditions as required under section 68, i.e., the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO was based on conjectures and surmises hence, cannot be justified. Therefore, this Tribunal was inclined to delete the addition confirmed by the CIT(A).

Relied:CIT v. Orissa Corporation (P) Ltd. (1986) 159 ITR 78 (SC) : 1986 TaxPub(DT) 1425 (SC), CIT v. Smt. P. K. Noorjahan (1999) 237 ITR 570 (SC) : 1999 TaxPub(DT) 80 (SC), Dy. CIT v. Rohini Builders (2002) 256 ITR 360 (Guj) : 2002 TaxPub(DT) 305 (Guj-HC), Nemi Chand Kothari (2004) 136 Taxman 213 (Gau) : 2003 TaxPub(DT) 1401 (Gau-HC), CIT v. S. Kamaljeet Singh (2005) 147 Taxman 18 (All.) : 2005 TaxPub(DT) 1275 (All-HC), DY. CIT v. Global Mercantiles (P) Ltd. in ITA No. 1669/Kol/2009, dt. 13-01-2016, R.B Horticulture & Animal Projects Co. Ltd, ITA No. 632/Koll2011, dt. 13-1-2016, ITA No. 1061/Ko1/2012 in the case of ITO Wd.3(2) Kol, v. M/s. Steel Emporium Ltd., dt. 5-2-2016, ITO v. Cygnus Developers (I) P Ltd. in ITA No. 282/Kol/2012, dt. 2-3-2016, Delhi High Court in the case of CIT v. Gangeshwari Metal (P) Ltd. (ITA No. 597 of 2012), dt. 21-1-2012, CIT v. Lovely Exports (P) Ltd. (2008) 216 CTR 195 (SC) : 2009 TaxPub(DT) 261 (SC), CIT v. Mayawati (2011) 338 ITR 563 (Delhi) : 2011 TaxPub(DT) 1993 (Del-HC), Dy. CIT v. Alcon Biosciences (P) Ltd., ITA No. 1946/M/2016, Order, dt. 28-2-2018, CIT v. Leonard Commercial (P) Ltd. on 13-6-2011 in ITAT No 114 of 2011, CIT v. Chain House International (P) Ltd., Order, dt. 7-8-2018 and ITAT, Mumbai in the case of Green Infra Ltd. v. ITO ITA No. 7762/Mum/2012. Distinguished:CIT v. Novo Promoters & Finlease (P) Ltd. (2012) 342 ITR 169 (Del) : 2012 TaxPub(DT) 1558 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13



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