Goldmoon Exports Private Limited Vs ITO (ITAT Kolkata)
Section 68 Share Capital Addition Deleted—Non-Compliance to Summons Alone Cannot Justify Addition (AY 2012-13)
The Kolkata ITAT (B Bench) allowed the appeal of Goldmoon Exports Pvt. Ltd. for AY 2012-13 and deleted the addition of ₹3.79 crore made under section 68 on account of share capital and share premium.
The Tribunal held that:
- The assessee had furnished complete documentary evidence to establish identity, creditworthiness and genuineness of the 14 subscribing companies, including PANs, ITRs, audited financials, bank statements and confirmations.
- The AO’s addition was based primarily on non-compliance with summons issued under section 131 and on the perception that shares were issued at a high premium, without pointing out any defect or discrepancy in the evidences on record.
- Non-appearance in response to summons u/s 131, by itself, cannot be a valid ground for addition under section 68 when the assessee has discharged the primary onus through documentary proof.
- The AO did not conduct any further enquiry to dislodge the evidences filed by the assessee.
- The proviso to section 68 (source of source) inserted by the Finance Act, 2012 is applicable only from AY 2013-14 and therefore does not apply to AY 2012-13.
- In pre-amended section 68 cases, the assessee is required to prove only source and not source of source, as held by Bombay HC in Gagandeep Infrastructure (P) Ltd. and SC in Lovely Exports.
Outcome:
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