Sumit Global Pvt. Ltd. Vs ITO (Rajasthan High Court)
Rajasthan High Court held that addition u/s. 68 of the Income Tax Act towards unexplained cash credit sustained as assessee failed to discharge initial onus of proving identity, creditworthiness and genuineness of transaction.
Facts- The original return was filed by the appellant-company on 30/09/2014. Subsequently, the case was taken up in a scrutiny u/s. 143 (3) of the Income Tax Act, 1961 and on 27/12/2016 the Assessment Officer passed an order of addition of Rs.4,13,41,500/- u/s. 68 of the Act, 1961 assigning the reason that share application money was received from bogus shell companies, which actually belong to the appellant.
The appellant filed an appeal before the CIT (Appeals) and the CIT (Appeals) by its order carved out the addition of Rs.4,13,41,500/- as it was found to be for different Assessment Year. Rs.2,26,41,500/- was found to have been received for previous assessment year and for the relevant Financial Year 2013-14: Assessment Year 2014-15. It was also found that Rs.1,87,00,000/- was received by the assessee company during the year which is subject matter of consideration in appeal. ITAT dismissed the appeal. Hence this appeal.
Conclusion- The Supreme Court in the matter of Principal Commissioner of Income Tax (Central-1) Vs. NRA Iron and Steel Private Limited {(2019) 15 SCC 529} has laid down the parameters and the issues which arises for determination whether the respondent assessee has discharged the primary onus to establish the genuineness of the transaction required u/s. 68 of the Act, 1961. It primarily laid down that the initial onus is on the assessee to establish proof of identity of the creditors; capacity of creditors to advance money; and genuineness of transaction.
