Case Law Details
CIT (Central) Vs. M/S Russian Technology Center (P) Ltd. (Delhi High Court)
The preceding enumeration of the circumstances of the case show that the assessee had furnished all relevant data before the AO and the CIT(A), which, however, were not inquired into by the AO. Instead he obdurately adhered to his first impression and/or initial understanding that the entire transaction was neither creditworthy nor genuine. The assessee relied upon the documents to prove that the monies had been received through banking channels from its principal and other related companies; it had submitted the FIPB Approval dated 10.12.2005 authorizing the assessee company to raise capital upto Rs. 600 crores, copy of certificates of incorporation of share holders, copy of bank statement, copy of Form 2 filed before ROC, copies of Certificates of (i) Incorporation of RTCHL, (ii) Incumbency of RTCHL, (iii) Good Standing of RTCHL, (iv) Director Certificate of RTCHL as well as the Balance Sheet of RTCHL for the years 2004-05 and the confirmation given by the remitters towards remittance of share capital etc. This was all that the assessee could have furnished in the circumstances. It could not be expected to prove the negative that the monies received by it were suspicious or not genuine infusion of capital etc. The assessee had discharged its burden of proof in terms of the settled dicta in Divine Leasing (supra). It is only logical to expect that if the AO was not convinced about the genuineness of the said documents, he would have inquired into their veracity from the bank(s) to ascertain the truth of the assessee’s claims. Having not done so, he was not justified in disregarding the assessee’s contentions that the infusion of monies into its accounts was legitimate. Consequently, the AO was not justified in making additions of the various sums under Section 68 of the Act.
FULL TEXT OF THE HIGH COURT JUDGMENT / ORDER IS AS FOLLOWS:-
1. These appeals have been preferred by the Revenue under Section 260 A of the Income Tax Act, 1961 (hereinafter to be referred as ‘the Act’) against the common order dated 12.04.2013 passed in ITA Nos. 4932,4933, 5390 & 5391/Del/2011 and the common order dated 30.09.2014 passed in ITA Nos. 4629,4630,4631,4632,4633 & 4707/Del/2013, whereby the Income Tax Appellate Tribunal (‘the Tribunal’) had allowed the assessee’s appeal and deleted the additions made by the Assessing Officer (‘AO’).
2. The relevant facts of the case pertaining to the appeals filed in 2013 are that pursuant to the search proceedings under Section 132 of the Act conducted at the office and residential premises of the assessee, a reassessment order was passed by the AO under Section 153A of the Act, whereby inter alia additions of various amounts were made under Section 68 of the Act for Assessment Years (AYs) 2002-03, 2003-04, 2005-06 and 2007-08. These amounts, being primarily towards monies received from various companies as well as dis allowances of expenditure, were debited to the profit & loss account for AYs 2002-03, 2003-04 and 2005-06. For AY 2007-08 dis allowance of interest of Rs. 75,47,897/- on unsecured loans was added under Section 68 of the Act and an amount of Rs. 1,51,200/- which was expended on the foreign guests was added.
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