Case Law Details
Brief summary
The assessee is a private company incorporated on 11.03.2003. Assessment was done u/s 143(1) of the Income Tax Act, 1961. Later revenue re-opened the assessment u/s 147 and 148 of the Act. In reassessment proceedings A.O. was not convinced by the explanation furnished by the assessee with regard to share capital received from six applicants and a sum of Rs.24 lacs was added u/s 68 of the Act. Appeal filed with CIT was rejected on the ground of assessee inability to explain the identity, genuineness and creditworthiness of the persons who have allegedly made the investment. Further Aggrieved with the order of ITAT, the assessee is in appeal before the High Court.
Contention of Assessee
The appellant urged that the share applicants were friends and relatives of the Directors of the appellant company and that since the entity was incorporated just a few days before the end of the financial year, it was unexpected to generate any income. It was further contended that given the CIT (Appeals)’s order which expressly recognized that the sum of Rs.24 lakhs in fact emanated from the directors of the share applicants, it could not be said that requirement of Section 68 of the Act is not discharged.
Contention of Revenue
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