Section 68 addition not sustainable if Assessee discharges primary onus by submitting sufficient documentary evidence

ITO Vs Hanumant Ingots Pvt. Ltd. (ITAT Raipur)

Facts- The assessee had filed its ROI for the AY 2012-13 on 26.09.2012, declaring an income of Rs.2,82,249/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s.143(2) of the Act.

During the course of the assessment proceedings, it was observed by the A.O that the assessee during the year under consideration, i.e., its first year of operation was in receipt of share capital/premium amounting to Rs.66,65,000/- from 16 persons. Also, it was noticed by him that the assessee had during the year under consideration raised loans from various parties.

In order to verify the genuineness and veracity of the share capital /premium, the A.O called for certain details from the share applicants vide notices issued u/s.133(6) of the Act. However, the aforesaid notices were not complied with by the respective parties and remained unanswered. Observing, that the assessee had failed to discharge the onus that was cast upon it as regards establishing the identity and creditworthiness of the share applicants, as well as proving the genuineness of the transactions of receipt of share capital/premium from the parties concerned, the A.O held the entire amount of Rs.66.65 lac as the income of the assessee from undisclosed sources u/s.68 of the Act.

As regards the loans that were claimed by the assessee company to have been received during the year under consideration, it was observed by the A.O that the assessee had though placed on record the confirmations of the respective lenders, but had failed to place on record any such documents which would substantiate the authenticity of the respective loan transactions and discharge the onus cast upon the assessee. Observing, that the notice that was issued to one of the lender i.e. M/s Dynamic Architectures Pvt. Ltd. seeking certain information u/s.133(6) of the Act had remained un-complied with, the A.O, for the said reason held the entire amount of the loans aggregating to Rs.98.25 lacs as the income of the assessee from undisclosed sources u/s. 68 of the Act. Backed by his aforesaid deliberations, the A.O vide his order passed u/s. 143(3), dated 25.03.2015 assessed the income of the assessee company at Rs.1,68,15,010/-.

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