The Tax Publishers2020 TaxPub(DT) 4301 (Mum-Trib)

INCOME TAX ACT, 1961

Section 68

Assessee by furnishing various documentary evidences such as confirmation letters, PAN, income-tax acknowledgement, directors report, audit report, balance sheet, bank statement, certificate of incorporation and Memorandum of Association of investor companies, proved identity and creditworthiness of investors and genuineness of transactions of receipt of share capital, therefore, AO was not justified in treating receipt of share capital/premium treated as unexplained credit based on statement recorded during search in case of alleged entry operator, and that too without providing opportunity of cross-examination to assessee.

Income from undisclosed sources - Addition under section 68 - Receipt of share capital/premium treated as unexplained credit based on statement recorded during search in case of alleged entry operator - Assessee proved identity, creditworthiness and genuineness

AO based on statement recorded by investigation wing in case of alleged entry operators treated amount of share capital/premium received by assessee as unexplained credit under section 68 and made addition. Held: Assessee by furnishing various documentary evidences such as confirmation letters, PAN, income-tax acknowledgement, directors report, audit report, balance sheet, bank statement, certificate of incorporation and Memorandum of Association of investor companies, proved identity and creditworthiness of investors and genuineness of transactions of receipt of share capital. In spite of filing of all the details, prima facie AO had not conducted any investigation or enquiry in respect of information submitted by the assessee and relied only on third party statement without any cross-examination. In such circumstances, AO was not justified in making addition under section 68.

Relied:DCIT v. M/s. Rane Prakashan Pvt. Ltd., ITA No. 3745/Mum/2017, ITO v. M/s. Agarwal Cloth Agency Pvt. Ltd., ITA No. 2969/Mum/2017, ITO v. M/s. Vishwa Vyapar Trading Pvt. Ltd., ITA No. 2888/Mum/2017, ITO v. M/s. Span Venture, ITA No. 4447/Mum/2017, Shree Laxmi Estate (P.) Ltd. v. ITO, ITA Nos. 5954/Mum/2016 & 2562/Mum/2017, ACIT v. M/s. Abani Sarbeswar Das, ITA Nos. 193/Mum/2018 and 232/Mum/2017, ITO v. M/s. Smt. Pratima Ashar, ITA No. 105/Mum/2018 : 2019 TaxPub(DT) 5070 (Mum-Trib), ITO v. M/s. Nityanand Industries Pvt. Ltd., ITA Nos. 4277 & 4278/Mum/2017, ACIT v. Shreedham Builders, ITA No. 5589/Mum/2017 : 2018 TaxPub(DT) 3839 (Mum-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :



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