PCIT Vs Central Plastics Pvt. Ltd. (Delhi High Court)
No ‘Source of Source’ proof required pre-amendment – Delhi HC ; Delhi High Court Dismisses Revenue’s Appeal – No Section 68 Addition on Share Premium; “Source of Source” Not Required for AY 2012-13
Assessee’s return of income for the AY 2012-13 was picked up for scrutiny on account of large share premium received by Assessee during the relevant period. AO observed that the Assessee had received share capital from three companies through banking channels. AO issued notices u/s 133(6) to the share applicants . However, the said entities did not respond to the said notices.e AO held that a sum of ₹ 5,79,99,060/- received by Assessee from the said entities remained unexplained & was taxable u/s 68.
CIT(A) held that the Assessee had discharged the initial onus u/s 68 by providing sufficient documents including bank details of the share applicants, copies of the bank statements, copies of the income tax return of the investor companies & the data from the MCA website. The said data reflected that the investor companies were live companies. The investor companies were also assessed to income tax & their final accounts indicated that sufficient funds were available with them. Thus, they had the ability to make the investments.
