Aadinath Gems And Jewellers Pvt. Ltd. Vs ITO (ITAT Mumbai)
Addition u/s 68 Needs Year-Specific Nexus – ITAT Deletes Premium, Sends Back Capital Issue- Fresh Verification Ordered: ITAT Remands Share Application Money Dispute to AO
Assessee, engaged in the business of trading in diamonds, had filed return declaring income of Rs.1.50 lakh. The return was selected for scrutiny & AO noticed that Assessee had raised share application money of Rs.70 lakh & share premium of Rs.6.40 lakh.
In respect of Rs.6.40 lakh, Tribunal noted that the amount was received in F.Y. 2007-08 relevant to A.Y. 2008-09. AO himself accepted this fact in his order. Since the sum pertained to an earlier year, no addition could be made u/s 68 in A.Y. 2010-11. Tribunal therefore directed deletion of this addition.
In respect of Rs.70 lakh received as share application money in the year under consideration, AO had issued notices u/s 133(6) to the share applicants. Four notices were returned unserved & Assessee expressed inability to produce the investors, who were located at Raipur. AO found that cash was deposited in the bank accounts of investors either on the date of transfer or just prior, raising doubts about genuineness & creditworthiness. AO made addition u/s 68.
