ACIT Vs. NRA Iron & Steel (P) Ltd. & Vice-Versa (ITAT Delhi)
Investor companies have confirmed making investments in assessee- company who were having sufficient net worth to make investment in assessee- company. Assessee filed I.T. returns, PAN, Bank Statements of investor Company to prove they are existing assessees of Department and are genuine parties. No efforts are made by assessing officer for production of investors at assessment stage. Therefore, the assessee has been able to prove identity of the share applicants, their creditworthiness and genuineness of the transactions in the matter. The learned Commissioner (Appeals), on examination of the material on record, further found that the only reason for the Revenue to goes for further verification was the report relating to survey conducted at the premises of the assessee- company which forms part of satisfaction recorded for reopening of the assessment proceedings. From the said report, learned Commissioner (Appeals) found that the business premises of the assessee actually belong to M/s. Bhushan Steel Ltd., and several other Companies having their Registered Offices at the same address. This created a suspicion in the mind of the Revenue. The learned Commissioner (Appeals) therefore, rightly noted that there is no law that more than one Company cannot have its Registered Office at one address. The Companies could have change their address later on. It is also an admitted fact that source of the capital investment companies were established during their respective assessment proceedings including in the case of the present assessee- company as per the findings of the learned Commissioner (Appeals). Learned Commissioner (Appeals) also found that no evidence was found during the course of survey to indicate introduction of unaccounted cash/funds in the form of share capital in these companies. These findings of fact recorded by the learned Commissioner (Appeals) have not been rebutted through any evidence or material on record. No evidence has been brought on record that money so invested in assessee- company came from coffers of assessee- company. All objections of assessing officer have been considered by learned Commissioner (Appeals) and various case law referred to above support the findings of learned Commissioner (Appeals) that addition has been correctly deleted.
The learned Departmental Representative relied upon the decision of various Hon’ble High Courts and Delhi High Court referred to above. In these cases, the gist of the findings are that the assessee failed either to prove the identity or capacity of the subscriber companies or that the amount was received as accommodation entries. However, the assessee- company, in the present case, has been able to prove the identity of the investors, creditworthiness and genuineness of the transaction in the matter. Therefore, learned Commissioner (Appeals) on proper appreciation of evidence and material on record, correctly deleted the addition of Rs. 17.60 crores.
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