Pahwa Buildtech Pvt. Ltd. Vs CIT (ITAT Delhi)
Additions for Share Application Money and Unsecured Loans Deleted as Assessee Discharged Primary Onus
The Delhi ITAT decided cross appeals filed by the assessee and the Revenue against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2011-12 arising from an assessment completed under Sections 147 read with 143(3) of the Income-tax Act, 1961. The assessee, engaged in real estate development and purchase and sale of land, had originally filed its return declaring an income of Rs.3,76,220. Following reopening of assessment, the Assessing Officer examined share application money of Rs.1 crore and unsecured loans of Rs.3,65,70,000 received during the year. Holding that the assessee had failed to establish the identity, creditworthiness and genuineness of the transactions, the Assessing Officer made additions under Section 68. The CIT(A) deleted the addition relating to unsecured loans but sustained the addition of Rs.1 crore towards share application money, leading to cross appeals before the Tribunal.
Assessee’s Appeal – Share Application Money
The assessee challenged the confirmation of the addition of Rs.1 crore received as share application money from ten applicants contributing Rs.10 lakh each. It submitted that confirmations, income tax returns, financial statements, share application forms, ROC Form No. 2, and bank statements in several cases had been furnished. It contended that the applicants belonged to the same group, were directors or relatives of directors, and that the amounts had been received through banking channels. It further produced a chart showing the net owned funds of the individual shareholders to establish their financial capacity.
