Sarthak Ispat Pvt. Ltd. Vs ACIT (ITAT Raipur)
ITAT Raipur held that matter regarding unexplained money addition under section 68 of the Income Tax Act restored back as basic ingredients required u/s 68, i.e., identity / creditworthiness of the investors and genuineness of transactions not satisfactorily explained.
Facts- Vide the present appeal the assessee has mainly contested confirming the addition of Rs. 3.25 Crore made by Ld. AO under section 68 of the Act, treating the same as unexplained cash credit on account of share capital / share premium received by the assessee company.
The assessee also contested confirming addition of Rs. 36,43,972/- made by the Ld. AO on account of unaccounted income of the assessee by estimating the Gross Profit of the assessee at 8% of the unaccounted sales.
Conclusion- Admittedly, the issue of unexplained money received by the assessee in the garb of share capital / premium / application money was discussed at length by Ld. AO. Undoubtedly, sufficient opportunities are afforded to the assessee to explain the basic ingredients required u/s 68, i.e., identity / creditworthiness of the investors and genuineness of transactions, however, the assessee fails in discharging the onus cast upon it to satisfy such conditions. The contention by Ld. AR that such unexplained investments received by the assessee are declared by the assessee, which was raised before Ld. AO and such contentions are noted at para 4.17, cannot be accepted in totality as nothing corroborative could be brought on record to support such claim, at the same time there was no whisper in the assessment order dealing with and dislodging such contentions, further, Ld. CIT(A) also had not commented on such claim of the assessee emerging from the assessment order, therefore, in all fairness the controversy raised in ground no. 3(b) in the assessee’s appeal qualifies to be restore back to the file of Ld. CIT(A) for fresh adjudication. Needless to say, the assessee shall be afforded with reasonable opportunities of being heard in the set aside appellate proceedings in accordance with law. In result, Ground No. 3(b) of the assesse’s appeal is partly allowed for statistical purposes.
