DCIT Vs ANR International Pvt. Ltd. (ITAT Delhi)
Share Premium Addition Quashed Because Investors’ Net Worth Supported the Investments; ITAT Upholds Rule 46A Evidence Because AO Allowed Insufficient Time to Prove Creditworthiness; Section 68 Addition Deleted Because Identity, Genuineness, and Creditworthiness Were Established; ITAT Rules That Source of Source Need Not Be Proved for Relevant Assessment Year.
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue’s appeal and upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)] deleting an addition of Rs.3 crore made under Section 68 of the Income Tax Act in respect of share capital and share premium received by the assessee company for Assessment Year 2017-18.
The assessee had filed its return of income on 26 October 2017 declaring total income of Rs.5,29,89,170. The return was processed under Section 143(1), and the case was subsequently selected for limited scrutiny through CASS. During the assessment proceedings, the assessee explained that it was engaged in the business of import and trading of chemicals and also earned commission as a consignment agent.
During the relevant year, the assessee issued 10,00,000 equity shares having a face value of Rs.10 per share at a premium of Rs.20 per share. The company received share capital aggregating to Rs.1 crore and share premium of Rs.2 crore from three investors, namely Ritika Chhawchharia, Anup Kumar HUF, and Rishu Agencies Pvt. Ltd. The assessee furnished copies of income tax returns, statements of income, and bank statements of the investors.
