Case Law Details
I.T.O Vs Placid Buildwell Pvt Ltd (ITAT Delhi)
The case of I.T.O Vs Placid Buildwell Pvt Ltd, heard by the ITAT Delhi, centers around the validity of an addition under section 68 of the Income Tax Act. The Revenue challenged the deletion of an addition of Rs. 16,55,00,000 made by the AO. The case involved scrutiny of transactions between the assessee and various entities.
The Revenue argued that the funds received by the assessee from certain entities lacked creditworthiness and authenticity. They alleged that these entities were merely paper companies without substantial income or net worth. However, the assessee contended that the transactions were legitimate and supported by evidence.
During the assessment, it was revealed that the assessee had received significant sums as share capital/premium from multiple entities. The Assessing Officer made additions based on suspicions regarding the nature of these transactions.
However, the CIT(A) and subsequently the ITAT Delhi found in favor of the assessee. They held that the assessee had sufficiently demonstrated the legitimacy of the funds received. The assessment status of the entities involved, particularly their acceptance in other assessments, bolstered the assessee’s case.
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