Brief about the case
The assessee is a private Company and has issued new shares of Rs.23,50,000 along with share premium of Rs.2,11,50,000.The assessee was asked to furnish the details of all shareholders along with name, address PAN and amount of capital introduced. From the details provided by the assessee, AO observed that the registered office and place of assessee’s business was in Lucknow, whereas all the 15 companies who have invested their money are from Kolkata. Out of which 12 companies are operating from four same addresses. AO issued letter u/s 133(6) of the Act to all alleged shareholders on 14-03-2015.But there was no compliance from any party on the appointed date. After intimating about the matter to the assessee, shareholders submitted the required documents. But AO did not find them genuine. Then the Income Tax Inspector personally visited the given addresses and none of the companies were found operating from the given addresses. Hence these companies were held bogus and mere briefcase companies and accordingly AO made addition of Rs.1,60,00,000 as unexplained credit u/s 68 of the Act.
Aggrieved, the Assessee filed an appeal before the CIT(A). The CIT(A) called the remand report from AO directing him to conduct proper enquiry on basis of written submission by the assessee. During the remand report, AO again issued commission u/s 131(1)(d) of the Act for further enquires in the matter. In the report it was noted that proper documents were submitted by the assessee. In view of CIT(A) complete details were filed with regard to the identity and creditworthiness of shareholders and also the genuineness of transaction, hence no disallowance u/s 68 of the Act was called for. Aggreived, the revenue appealed for reversal of decision to the Lucknow ITAT. However, the ITAT upheld the order of CIT(A).
Detail
Facts of the case:
