Case Law Details
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.
After perusal of the remand report as discussed above, we are of the view the conditions specified under Section 68 of the Act has been duly satisfied in respect of four companies namely In time Dealers Private Limited, Vedant Commodeal Private Limited, Jackpot Vintrade Private Limited and Newedge Vinimay Private Limited. Now the issue remains to be answered in respect of Sh. Shrishti Developers Private Limited and Snowdrop Tradecom Private Limited which was also added to the total income of the assessee on account of unexplained cash credit due to the fact that these parties did not respond to the notices issued under Section 133(6) of the Act.
The investment in RRPL was sold by the assessee to the aforesaid six companies which has been shown in the Annual Return of RRPL as evident from the copy of the annual return filed by the RRPL to ROC.
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