Case Law Details
ITO Vs AMS Trading & Investment Pvt Ltd (ITAT Mumbai)
ITAT Mumbai held that addition u/s. 68 of the Income Tax Act merely based on statement of the key person which was retracted subsequently unsustainable as genuineness, identity and creditworthiness proved.
Facts- The assessee company is engaged in the business of investments and trading. The assessment of the assessee was completed u/s. 143(3) of the Act accepting the returned income of Rs. Nil. Subsequently, AO received the information from DGIT (Inv) Mumbai that the assessee is engaged in obtaining the accommodation entries and is a beneficiary. During F.Y. 2009-10 the assessee has received the share application money from M/s Empower Industries Ltd which is engaged in providing accommodation entries.
AO found that the share application money and share premium does not satisfy the test of genuineness, creditworthiness, and identity as per the provisions u/s. 68 of the Act and treated as unexplained credit u/s. 68 of the Act Rs.1,55,00,000/- and the A.O. has estimated brokerage/commission at 5% of the value of Rs. 7,75,000/- u/s. 69C of the Act.
CIT(A) allowed the appeal and deleted the addition. Being aggrieved, revenue has preferred the present appeal.
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