Case Law Details
DCIT Vs Bhaijee Commodities (P) Ltd. (ITAT Delhi)
It is seen that the assessee has filed sufficient documents e.g. Permanent Account Numbers, bank statements, etc. to establish the identities and creditworthiness of the two share applicants. The copies of the bank statements of the share subscribers wherein the transactions are reflected as well as the fact that they are assessed to income tax establish the creditworthiness of the parties concerned while the genuineness of the transaction is borne out by the fact that the transactions were through banking channels.
AO required assessee-company to prove genuineness of share capital along with premium received by it. Assessee furnished various evidences in that regard. However, AO made addition under section 68 on the ground that in response to summons under section 131 shareholder companies had not appeared for personal deposition.
On going through the assessment order, it is seen that the assessing officer has not been able to rebut or find any discrepancy about the documents submitted by the assessee. If that be the case, the Assessing Officer cannot make addition under Section 68 in the hands of the appellant company. The assessee company has been able to prove its case and in case the assessee has failed to produce the shareholders, as held by the jurisdictional High Court in the case cited above, the Assessing Officer cannot shift the burden on the assessee company. In case the Assessing Officer had any doubt about the shareholders, nothing stopped him from taking appropriate action or proceeding against these shareholders. It is a case where the assessee has been able to meet the requirements to justify its case. If the notices issued by the A.O. to the share subscribers were not complied with or came back unserved, this could not be held against the assessee, which had discharged the initial onus which lay upon it by proving the identity of the share applicants and the genuineness of the transactions.
In view of this, addition made under section 68 was not justified.
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