Case Law Details
Renu Proptech Pvt Ltd. Vs ACIT (ITAT Delhi)
Considering the plethora of documentary evidences, we find that not only the assessee has established the source of the creditor, but it has also furnished documentary evidences to show the’ source of source’. We find that the AO, while making addition, has made general observations relating to the circulation from one source to the other.
On the one hand, the AO observes that all the share applicants/individuals/HUF/companies are related to the assessee company and on the other hand the AO is doubting the identity of the share applicants. The AO cannot blow hot and cold in the same breath. Further, the first appellate authority, while deleting the additions on account of 10 share applicants on the same set of facts has erred in confirming the addition on account of two share applicants, namely, Shri Anand Gupta, HUF and Shri Sanchit Gupta.
We find that the entire share capital and premium has been received through account payee cheques drawn on the account of shareholders who are all independent assessees and have confirmed the transaction of having made investments in the assessee company and have also filed their respective bank accounts and have explained the nature and source of funds in their bank account out of which share subscription including premium has been paid to the assessee company. These evidences cannot be brushed aside lightly and preponderance of human probability cannot get precedence over these evidences galore.
It is pertinent to note that the AO has not doubted the share premium of Rs. 490/- per share as the same is supported by the valuation report as per the I.T. Rules. By disbelieving the source of source being long term capital gain from the sale consideration of shares of Shital Leasing and Finance Ltd and Shilpi Cable Technologies, the AO cannot justify the addition in the hands of the assessee company. As mentioned elsewhere, any addition which deserved to be made should have been made in the hands of the share applicants who have shown their source of source as sale of shares of these companies or alleged accommodation entries. Whether the assessee has discharged the burden cast upon it by the provisions of section 68 of the Act or not is purely a question of fact and has to be decided on the facts of each case and, therefore, no judicial decision has been considered on the peculiar facts of the case in hand.
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