Case Law Details
Satyam Smertex pvt. Ltd. Vs DCIT (ITAT Kolkata)
ITAT Kolkata held that section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source, it shall be assessed as its undisclosed income. In the facts of the present case, both the nature & source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO’s record, including that of the directors and share holders of share subscribing entities as discussed supra. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO and confirmed by Ld CIT(A) are based on conjectures and surmises, so their impugned action cannot be justified. In the facts and circumstances of the case as discussed above, no addition was warranted under Section 68 of the Act. Therefore, ITAT allows the appeal of assessee and direct deletion of addition of Rs 16 cr under section 68 of the Act.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal filed by the assessee against the order of Ld. CIT(A)-5, Kolkata dated 23.09.2019 for AY 2012-13.
2. The only ground of appeal of the assessee is against the action of the Ld. CIT(A) in confirming the addition of Rs.16 cr. u/s. 68 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) being the share capital and share premium received during the year. Ground no. 1 of the assessee is as under:
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