DCIT Vs P & R Engineering Services Pvt. Ltd. (ITAT Delhi)
Once ITAT Confirms Share Capital as Genuine in Earlier Years, Revenue Cannot Reopen the Pandora’s Box Again – Consistency Beats Bogus Entry Allegation
Assessee received share application money of ₹8.28 crores in AY 2010-11 from three companies. AO, relying merely on Investigation Wing information & the statement of an alleged entry operator, treated all three investor companies as paper entities & made addition u/s 68 holding that identity, creditworthiness & genuineness were not proved.
CIT(A) deleted the entire addition after noting that in earlier years (AY 2008-09 & 2009-10), on identical facts & with the same parties, similar additions were deleted & those orders were confirmed by ITAT in November 2023. The investor companies had filed PAN, bank statements, confirmations, ROC filings, financials & share allotment documents, proving their identity & genuineness. The mere statement of an entry operator without naming the assessee & without cross-examination could not override documentary evidence.
Before the Tribunal, the Revenue relied on the same allegations but could not disprove the earlier ITAT findings. The ITAT observed that the facts were identical in all years, the issue was already decided in favour of the assessee in AYs 2008-09 & 2009-10, & no new adverse material was brought on record. The principle of consistency applied, & even the third company (Sopan Merchants) was held genuine in group cases accepted by the department. Therefore, the CIT(A)’s deletion of the entire addition was upheld.
Result: Revenue’s appeal dismissed. Addition u/s 68 on account of share application money deleted in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
