Case Law Details
ITO Vs Blisswood Green Infrastructure and Developers Pvt. Ltd. (ITAT Delhi)
Conclusion:
Addition under section 68 on account of bogus share capital was unjustified as the identity and creditworthiness of share subscribers and genuineness of receipt of share capital stood established and non-production of directors of subscriber companies could not be a sole ground to make addition.
Held:
Assessee company was engaged in the business of real estate agents, dealers in land, plots, buildings etc. and also in generation of power through wind mill and agricultural activity. In the assessment proceedings, AO noticed that assessee had claimed to have received share capital/premium. AO, after scrutiny of details, however, made an addition u/s 68 as bogus share capital and after setting off of brought forward losses, the assessment was completed. It was held investing companies were regularly filing income-tax returns and were properly registered with RoC. No instance of any cash deposit in bank accounts of investing company was pointed out and investment had been made through banking channel. Assessee could at most request directors of investor companies to appear before AO, but had no power to compel them to do so. Thus, it was for department to enforce their attendance and on failure to take action against them as per law. Thus, addition under section 68 was not justified as identity and creditworthiness of share subscribers and genuineness of receipt of share capital stood established.
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