M/s Kesha Appliances Pvt. Limited Vs. ITO (ITAT Delhi)
The addition in the present case was made by the AO for the proceeds of sales of investment which were sold by the assessee to six companies as stated above. As per the AO, the parties to whom shares were sold did not respond to the notices issued under section 133(6) of the Act, therefore, the same was treated as unexplained cash credit under section 68 of the Act. The view taken by the AO was subsequently confirmed by the learned CIT(A).
On perusal of the above discussion and records, we observe that the assessee was holding shares of RRPL as shown in the audited financial statements. These investments undoubtedly were coming from the earlier years therefore, an inference can be drawn that the investment shown by the assessee in RRPL was duly accepted in the earlier years. Now the issue arises whether the impugned sale made by the assessee to the aforesaid six companies represents genuine sales of the investments. In this regard, we observe that the confirmations from all the parties were duly filed by the assessee and accordingly, the AO in its remand report accepted the genuineness of the transaction in respect of four parties.
