Case Law Details
Atlantic Dealers Pvt. Ltd. Vs ITO (ITAT Kolkata)
ITAT Kolkata held that addition u/s 68 unwarranted as AO failed to conduct an independent enquiry post submission of documents by the assessee relating to identity, genuineness of the transaction, and credit-worthiness of the subscribers.
Facts- In the set aside assessment proceedings, AO noted that the assessee during the year has shown receipt of share application money of Rs.14,78,00,000/- on allotment of 144000/- shares to 37 share applicant companies.
To verify the identity and creditworthiness of the shareholders and also about the genuineness of the transaction, AO issued notices u/s 133(6) to them calling for various details including the source of fund for investment in the assessee company. Out of them, 13 letters issued to different shareholders had been returned back. Further, summons u/s 131 of the Act to the directors of the share subscriber companies.
Since the said summons u/s 131 were not complied with, the AO held that the assessee had failed to discharge the burden of proof to substantiate the identity and creditworthiness of the share subscribers and genuineness of the transaction.
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