Mantram Commodities Pvt. Ltd. Vs ITO (ITAT Delhi)
So far as the addition under section 68 of the I.T. Act, 1961 is concerned, I find the assessee has filed the details such as P & L A/c, balance-sheet, bank statements, confirmation letters, PAN, copy of acknowledgment of return, Memorandum and Articles of Association of Companies etc. Further out of the 04 Investor Companies, it is seen that in case of Kuber Buildmart and Texcity Construction Pvt. Ltd., although the shares were issued during the impugned assessment year, however, the amounts were received in the preceding years which is verifiable from the bank statements filed by the assessee. In the case of Goodluck Industries Ltd., and Rishikesh Buildcon Pvt. Ltd., the assessee has filed the requisite details to substantiate the identity and creditworthiness of the share applicants and genuineness of the transaction. Nothing has been brought on record to negate the various evidences filed by the assessee. A perusal of the audited balance-sheet of these Investor Companies shows that these companies are having sufficient capital and reserves to make the investment in the assessee company and the entire transactions have been made through banking channel. Merely because the Investor Companies have shown meager income during the impugned assessment year, the same in my opinion, cannot be a ground to doubt the creditworthiness of the said company especially when the said company is having sufficient funds in its account in shape of share capital and free reserves.
Since the assessee in the instant case has proved the identity of the investors and filed sufficient details to substantiate the creditworthiness and genuineness of the transaction, therefore, respectfully following the decisions cited (supra), I hold that the Ld. CIT(A) was not justified in confirming the addition made by the A.O. under section 68 of the I.T. Act, 1961.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal filed by the assessee is directed against the order dated 17.03.2020 of the Ld. CIT(A), Faridabad, relating to A.Y. 2016-17.
2. There was a delay of 18 days in filing the appeal, for which, the assessee has filed condonation application along with affidavit explaining the reasons for the delay.
2.1. After considering the contents of the application and after hearing both the sides, the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.
3. Facts of the case, in brief, are that the assessee is a company and filed its return of income on 28.08.2016 declaring income of Rs.1,46,020/-. The return was processed under section 143(1) of the I.T. Act, 1961. Subsequently, the case was selected for limited scrutiny under CASS to verify whether the funds received in the form of share premium are from disclosed sources and have been correctly offered for tax. Accordingly, notice under section 143(2) and 142(1) of the I.T. Act, 1961 were issued to the assessee calling for various details. In response to the same, the assessee filed the requisite details from time to time.
3.1. During the course of assessment proceedings, the A.O. noted that assessee company has received Rs.42 lakhs as share premium on 60000 shares which have been allotted to the following companies/persons.
