CIT Vs Lalitha Jewellery Mart Pvt. Ltd (Madras High Court)
Madras High Court held that addition under section 68 of the Income Tax Act towards unexplained cash credit merely on the basis of certain statement without considering documentary evidence is not justifiable. Accordingly, writ of revenue is dismissed.
Facts- The assessee company is engaged in the business of retail trading in gold jewellery and the assessee had filed its return of income for the Assessment Year 2012-2013 on 28.9.2012 declaring total income of Rs.27,59,23,680/-. On 2.9.2014, a search and seizure operation was conducted u/s. 132 of the Income-tax Act, 1961 and, consequent thereto, notice u/s. 153A of the Act was issued to the assessee on 9.1.2015.
During assessment proceeding, AO also opined that the transaction between the assessee and the shareholders is not a genuine transaction and does not satisfy the conditions prescribed u/s. 68 of the Act. Therefore, AO held that the amount of share application money/share premium received from companies controlled by Shrish Chandrakanth Shah is unexplained cash credit which is taxable u/s. 68 of the Act and, accordingly, AO treated a sum of Rs.51 Crores share capital/share premium as unexplained cash credit and brought to tax u/s. 68 of the Act and passed the assessment order dated 30.12.2016.
