Pato Builders Pvt. Ltd Vs ACIT (ITAT Ranchi)
The Income Tax Appellate Tribunal (ITAT), Ranchi Bench, delivered a partial verdict in the appeal filed by Pato Builders Pvt. Ltd. against the order of the Commissioner of Income Tax (Appeals), Jamshedpur, concerning the Assessment Year (AY) 2012-13. The appeal raised four primary issues related to additions and disallowances made by the Assessing Officer (AO).
Issue 1: Disallowance of Share Application Money
The central and most significant issue in the appeal involved the disallowance of $1,00,56,000/- received by the assessee company as share application money. The assessee had received the funds from approximately fourteen shareholders but was only able to provide details for four individuals/entities. The remaining nine shareholders remained unsubstantiated.
Assessee’s Submission
The assessee’s counsel submitted a list of shareholders to the AO. However, the company could only provide substantial information—indicating identity and the transaction—for four specific parties:
1. M/s Pato Infrastructure Ltd.: A sister concern.
2. Shri Mukesh Kumar: Director of the assessee company (for 15,000 shares).
3. Smt. Champa Devi: Mother of the Director (for 11,000 shares).
4. Smt. Sunita Devi: Wife of the Director (for 9,000 shares).
Crucially, the assessee admitted that it was unable to provide any further information, or even the basic details, for the remaining nine shareholders. This inability was partly attributed to the fact that the company was reportedly in the process of winding up due to the Director’s ongoing, long-term health issues requiring medical treatment.
