ACIT Vs Subharti Media Ltd (ITAT Delhi)
ITAT Delhi held that addition u/s. 68 of the Income Tax Act towards share application money, as unexplained credit, deleted as identity, genuineness and creditworthiness of the shareholders proved.
Facts- A search and seizure operation u/s 132(1) of the Act was conducted on 12.11.2010 in M/s Subarti KKB Charitable Trust and Dr. Atul Krishan group of cases. Pursuant to documents found relating to the assessee M/s Subarti Media Ltd. proceedings u/s 153C of the Act were initiated and notice was issued u/s 153C r.w.s. 153A of the Act. Thereafter, AO treated the share application money of Rs.2,19,91,020/- from the above said parties as an unexplained credit u/s 68 of the Act holding that the assessee has not proved the identity, creditworthiness and genuineness of the shareholders. CIT(A) deleted the addition.
Conclusion- Hon’ble Allahabad High Court, in the case of CIT Vs. Mishra Preservers Pvt. Ltd., has held that if the shareholders are identified and they are not fictitious persons, the payments are made by cheques and were assessed to Income tax there cannot be any addition u/s 69 of the Income Tax Act.
Held that the assessee has proved the identity, genuineness and creditworthiness of the shareholders and deleted the addition made by the AO in respect of share application money from shareholders.
