ACIT Vs Citygold Investments Pvt. Ltd. (ITAT Mumbai)
Mumbai ITAT Deletes Section 68 Addition as Investigation Wing Report Alone Cannot Dislodge Documented Share Application Transaction
The Mumbai ITAT upheld the deletion of an addition of ₹2.50 crore under section 68 towards share application money, holding that the Assessing Officer cannot treat a transaction as bogus solely on the basis of a general Investigation Wing report without conducting any independent enquiry. The Tribunal noted that the assessee had discharged its initial onus by furnishing confirmation from the investor, PAN, income-tax return, financial statements and bank statements evidencing receipt through banking channels, thereby establishing the identity, creditworthiness and genuineness of the transaction. It further observed that the Assessing Officer failed to establish any cash trail or nexus between the assessee and the alleged entry operators, and relied exclusively on an investigation report alleging that the investor company was an accommodation entry provider. The Tribunal also took note of the fact that the share application money was subsequently refunded to the investor and that, in a search assessment under section 153A read with section 143(3) for the subsequent assessment year, the Department had itself accepted a similar transaction with the same investor. Finding no infirmity in the CIT(A)’s factual conclusions, the Tribunal dismissed the Revenue’s appeal and confirmed the deletion of the addition under section 68.
