Richa Finance & Investment Private Limited Vs ITO (ITAT Mumbai)
Section 68 Can’t Survive on Retracted Statement Alone: ITAT Deletes ₹81 Lakh Share Capital Addition
Mumbai ITAT allowed the appeal of Richa Finance & Investment Private Limited for AY 2007-08 & deleted the addition of ₹81 lakh made u/s 68 towards alleged unexplained share capital. Tribunal held that once the Assessee had discharged the primary onus by furnishing complete documentary evidence establishing identity, creditworthiness of investors & genuineness of transactions, the addition could not be sustained merely on the basis of statements recorded during search in the case of a third party, especially when such statements were subsequently retracted.
ITAT noted that the investor companies—Olive Overseas Pvt Ltd (formerly Realgold Trading Co Pvt Ltd), Yash-V Jewels Ltd & Lexus Infotech Ltd (formerly Triangular Infocom Ltd)—had already been held to be genuine & creditworthy by various co-ordinate benches in multiple cases. In the absence of any fresh incriminating material or adverse finding disproving the documents submitted by the Assessee, reliance solely on third-party statements without corroborative evidence was held to be impermissible. Accordingly, the addition confirmed by CIT(A) was set aside & the appeal of the Assessee was allowed in full
