Case Law Details
ACIT Vs. TRN Energy Pvt. Ltd (ITAT Delhi)
Section 68- Bogus share capital: Assessee- company produced sufficient documentary evidence before A.O. to prove the ingredients of Section 68 of the I.T. Act. The A.O. however, did not make any further inquiry on the documents filed by the assessee- company. The A.O. thus, failed to conduct any inquiry and scrutiny of the documents at assessment stage and merely suspected the transaction between the Investor Company and assessee- company because the Investor Company was from Kolkata. The A.O. thus, did not perform his duties at the assessment stage so as to make addition against the assessee- company. No cash was found deposited in the account of the Investor. Therefore, the totality of the facts and circumstances clearly prove that assessee- company discharged initial onus to prove identity of the Investor Company, its creditworthiness and genuineness of the transaction in the matter. The Ld. CIT(A) on proper appreciation of the evidence before him correctly deleted the addition. No interference is called for in the matter.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
The Departmental appeal as well as cross objections by Assessee are directed against the order of the Ld. CIT(A)-27, New Delhi, dated 09.11.2015, for the A.Y. 2012-2013.
2. Search and seizure and survey operation under section 132/133A of the I.T. Act was conducted on 12th April, 2012 in the case of the assessee- company along with other group cases of Aryan Group at various residential and business premises. The assessee company filed return of income declaring loss of Rs. 2,75,807. The A.O. issued notices under section 143(2) and 142(1) of the I.T. Act. The A.O. observed that during the year under consideration, the assessee- company has received fresh share application money of Rs. 10,63,50,000 from M/s. Jaisri Properties Exports Pvt. Ltd., The assessee was asked to furnish evidence in support of the genuineness of the share application money. The assessee in support of the genuineness of the share application received from the Investor Company, filed name of the party, address, PAN, bank statement, confirmation of the Investor and ITR of the Investor for the year under consideration. The A.O. further noted that audited accounts of the investor was not filed. The A.O. noted from the bank statement of the party, mostly for the date of transaction and a day or two prior to the date of transaction, there are high value transactions in those bank statement. There are numerous credits appearing in the bank account. The Investor filed return of income at Rs. 2,80,610. Therefore, financial capacity is not proved. In the absence of balance sheet, source of the credit entry was not proved. A.O, therefore, was of the view that creditworthiness of the Investor Company has not been proved. Mere production of the documentary evidence would not prove the genuineness of the transaction in the matter. The A.O. accordingly, treated the share application money as unexplained and made the addition.
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