Montrose Commodities Pvt. Ltd. Vs ITO (ITAT Kolkata)
Assessee, a private limited Company had received share capital & premium of ₹1.58 crore during AY 2012-13. The case was selected for scrutiny due to large share premium received. During assessment, Assessee furnished complete details including names & addresses of subscribers, audited financials, bank statements & confirmations. AO, however, made addition u/s 68 holding that since summons issued u/s 131 were not complied with by directors of subscriber companies, genuineness & creditworthiness remained unverified. Accordingly, entire ₹1.58 crore was added as unexplained credit.
On appeal, CIT(A) confirmed the addition, recording contradictory findings even though AO himself acknowledged receipt of evidences from Assessee.
After examining the assessment order & appellate order & also the evidences filed, Tribunal observed that assessee has discharged onus by filing the documents before AO & AO has not pointed out any discrepancies in the same. The addition was made merely on the ground that summons u/s 131 were not be complied with by the investors & therefore, the investments received by the assessee remain unverified. This cannot be the ground for making an addition in respect of share capital/ share premium by treating the same as unexplained money in the books of the assessee. Judicial precedents including CIT v. Orissa Corporation Pvt. Ltd. (159 ITR 78 SC), CIT v. Orchid Industries Ltd. (397 ITR 136 Bom), Crystal Networks Pvt. Ltd. v. CIT (353 ITR 171 Kol), & other Kolkata ITAT rulings squarely applied. Accordingly, addition was deleted.
