Annuva Infrastructure Pvt. Ltd. Vs ITO (ITAT Nagpur)
The Income Tax Appellate Tribunal (ITAT), Nagpur Bench, in the case of Annuva Infrastructure Pvt. Ltd. Vs. ITO, allowed the assessee’s appeal, deleting an addition of ₹15 lakh made under Section 68 of the Income-tax Act, 1961, regarding unexplained cash credits.
Background and Issue
The assessee, Annuva Infrastructure Pvt. Ltd., filed its return for the Assessment Year (A.Y.) 2011-12 declaring a loss. The case was subsequently reopened under Section 147 after a search conducted on Mr. Shirish C. Shah revealed that he was allegedly involved in providing bogus accommodation entries, including share capital, and had made a payment of ₹15 lakh to the assessee.
The Assessing Officer (AO) initiated reassessment proceedings. The assessee submitted that the ₹15 lakh was received on March 29, 2011, from M/s. Praneeta Industries Ltd. (now Adhar Venture India Limited) through proper banking channels. The assessee furnished extensive documentation to discharge the burden of proof mandated by Section 68, including:
- Copy of the company’s bank statement showing the transaction.
- PAN Card and postal address of M/s. Praneeta Industries Ltd.
- Copy of the Memorandum of Association, Income Tax Return acknowledgment, audited balance sheet, Profit and Loss account, and audit report of the creditor company.
- Copy of the confirmation from M/s. Praneeta Industries Ltd.
The AO, however, was unable to serve a notice on the creditor company and, despite the assessee requesting that the promoters/managers of the creditor be summoned under Section 131 for cross-examination, the AO refused, insisting the burden of proof rested solely with the assessee. Consequently, the AO treated the sum as an unexplained cash credit under Section 68. The Commissioner of Income-tax (Appeals) dismissed the assessee’s first appeal ex parte and affirmed the addition.
