DCIT Vs Balajee Loha Pvt. Ltd (ITAT Raipur)
ITAT Raipur held that addition u/s. 68 of the Income Tax Act made without invalidating evidences establishing identity/ creditworthiness of investor and genuineness of transaction not justifiable. Accordingly, appeal of revenue dismissed.
Facts- The assessee / appellant is a Pvt. Ltd. Company, engaged in the business of manufacturing and trading steel products. Return of Income for AY 2014-15 was filed on 29.09.2014, declaring total income at NIL. Subsequently, assessment proceedings u/s 143(3) are completed vide order dated 27.12.2016 after making additions on account of share application money u/s 68 for Rs.11,54,65,000/- and estimated disallowance out of consumption of Stores & Spares and Repairs & maintenance of Rs.1,59,401/-, aggregating to Rs.1 1,56,24,401/- thereby, the assessed income of assessee has been determined at Rs.11,11,09,885/-.
Conclusion- Held that if the assessee has prima facie have discharged the onus of establishing identity / creditworthiness of the investor and genuineness of the transaction, which are not refuted by exercising any independent enquiries by the revenue authorities, such evidence cannot be disregarded at the threshold and addition u/s 68 made without invalidating such evidence cannot be sustained.
Coming to the issue raised at whether disallowance u/s 68 can be made in a case where assessee had furnished all the requisite documents / explanation and had discharged the primary onus cast upon it and adverse opinion is formed and a contrary view have been adopted dehors exercising the powers / recourse u/s 131 or u/s 133(6) of the Act available with the revenue authorities to initiate independent enquiries before arriving at a negative conclusion. On this issue respectfully following the decision of Hon’ble Jurisdictional High Court in the case of Pawan Agrawal(supra), supported with judgment in the case of Abdul Aziz (supra) and G. Subha Devi vs ITO (supra), as all the necessary primary documents (discussed supra) are furnished by the assessee during the course of assessment proceedings to substantiate the identity / creditworthiness of the investors and genuineness of transactions, without negating such documents by way of conducting inquiries under the recourses available in the law, the addition u/s 68 cannot be sustained, thus, we direct to struck down the same.
