INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Credit in books of account showing sale of shares receivable by assessee having no stream of revenue -

AO alleged that assessee miserably failed to justify sum credited in its books of account of Rs. 19,50.000 on sale of shares receivable from certain private companies against which it also received shares in subsequent year. Therefore, AO applied provisions of section 68 and made an addition of Rs. 19,50.000 holding that assessee failed to prove identity, creditworthiness and the genuineness of transaction by showing sale of shares. Held: There was no infirmity in order of AO in making addition under section 68. More surprisingly assessee being a company which did not have any stream of revenue was engaging in buying shares of private limited company and selling shares of private limited companies, spoke volume about nature of activities carried on. All judicial precedents relied up on by assessee were distinguishable on facts. Thus, action of AO was confirmed with respect to addition under section 68.

Distinguished:Tin Box Company v. CIT (2001) 249 ITR 216 (SC) : 2001 TaxPub(DT) 1196 (SC), HH Sri Rama Verma v. CIT (1991) 187 ITR 308 (SC) : 1991 Supp (1) SCC 209 : 1991 TaxPub(DT) 0531 (SC), CIT v. Vishal Holding & Capital (P.) Ltd. (2011) 200 Taxman 186 (Del), CIT v. Ritu Anurag Agarwal [ITA No. 325/2008, dt. 22-7-2009], M/s. Abhijeet Enterprise Ltd. v. ITO [ITA No. 308/KOL/2017] : 2019 TaxPub(DT) 3597 (Kol-Trib), ITO v. Jatin Investment (P) Ltd. [ITA NO. 4325 & 4326 /DEL/2009, dt. 27-5-2015], ITO v. M/s. Diplomat Leasing & Finance (P) Ltd. [ITA No. 5929 (Del)/2010, dt. 9-12-2011], Manoj Aggarwal and others v. Dy. CIT (2009) 113 ITD 377 (Del) : 2009 TaxPub(DT) 0672 (Del-Trib)

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2014-15

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