Case Law Details
ACIT Vs TRN Energy (P) Ltd. & Vice-Versa (ITAT Delhi)
A.O. from the books of account of the assessee-company found that assessee-company has received fresh share application money of the impugned amount from Mis. JaisriProperties Exports Pvt. Ltd., The A.O. asked the assessee-company to prove the genuineness of the transaction in the matter with supporting documentary evidence. The assessee-company filed confirmation of the investor Company along with its particulars, bank statement and copy of the income tax return filed with the Department. The A.O. noted that there were high value transactions conducted by the investor Company. The investor Company has filed return of income at Rs.2,80,610 and copy of the balance sheet is not filed. The assessee-company has filed copy of the balance sheet before the authorities below. Copy of the same is also filed in the paper book. Page-53 of the paper book is balance sheet of the investor Company to show that it has total capital of Rs.40, 18,20,586 which was more than enough to make investment in share application money with the assessee-company. Thus, the objections of the A.O. have been clearly met by the assessee-company. it may also be noted that the A.O. did not dispute the identity of the investor Company and merely on account of low income declared by the investor Company was of the view that its creditworthiness is not explained. The A.O. on the one hand has mentioned in the assessment order that bank account of the investor Company reveal that there are high value transactions carried out through the Bank. Therefore, creditworthiness of the investor Company should not have been doubted. The assessee-company produced sufficient evidence before A.O. to discharge the initial onus upon it to prove the identity, creditworthiness and genuineness of the transaction in the matter. Moreover, no adverse material was found to prove that share application money received was bogus or was an arranged affair of assessee to evade tax. Thus, addition was deleted.
FULL TEXT OF THE ITAT JUDGMENT
The Departmental appeal as well as cross objections by Assessee are directed against the order of the Ld. CiT(A)-27, New Delhi, dated 09.11.2015, for the A.Y. 2012-2013.
2. Search and seizure and survey operation under section 132i133A of the i.T. Act was conducted on 12thApril, 2012 in the case of the assessee-company along with other group cases of Aryan Group at various residential and business premises. The assessee-company filed return of income declaring loss of Rs.2,75,807. The A.O. issued notices under section 143(2) and 142(1) of the i.T. Act. The A.O. observed that during the year under consideration, the assessee-company has received fresh share application money of Rs. 10,63,50,000 from Mis. JaisriProperties Exports Pvt. Ltd., The assessee was asked to furnish evidence in support of the genuineness of the share application money. The assessee in support of the genuineness of the share application received from the investor Company, filed name of the party, address, PAN, bank statement, confirmation of the investor and iTR of the investor for the year under consideration. The A.O. further noted that audited accounts of the investor was not filed. The A.O. noted from the bank statement of the party, mostly for the date of transaction and a day or two prior to the date of transaction, there are high value transactions in those bank statement. There are numerous credits appearing in the bank account. The investor filed return of income at Rs.2,80,6 10. Therefore, financial capacity is not proved. in the absence of balance sheet, source of the credit entry was not proved. A.O, therefore, was of the view that creditworthiness of the investor Company has not been proved. Mere production of the documentary evidence would not prove the genuineness of the transaction in the matter. The A.O. accordingly, treated the share application money as unexplained and made the addition.
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