ASR WINES (P) LTD.,BULANDSHAR vs. ITO WARD -1, BULANDSHAR

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ITA 638/DEL/2023Status: DisposedITAT Delhi06 May 2026AY 2010-119 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to prove the immediate source of cash deposited in the applicants' bank accounts. The reliance on a previous judgment was distinguished due to the facts of cash deposits in the present case.

What were the facts?

The assessee company received share application money, and the AO observed that a significant portion was deposited in cash into the bank accounts of share applicants just before cheques were issued to the assessee. The AO added this amount as unexplained credits.

What were the issues?

Whether the share application money, where cash was deposited in the applicants' accounts immediately before transfer to the assessee, constitutes unexplained credits under Section 68.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHIBENCH ‘A’, NEW DELHI

Before: Sh. Anubhav Sharma & Sh. Manish Agarwal

For Appellant: Dr. Rakesh Gupta, Adv, Adv. &
Hearing: 11.02.2026Pronounced: 06.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘A’, NEW DELHI Before Sh. Anubhav Sharma, Judicial Member & Sh. Manish Agarwal, Accountant Member ITA No. 638/Del/2023 :Asstt. Year: 2010-11 ASR Wines (P) Ltd., Vs Income Tax Officer, 44, Kaka Building, Satha Road, Ward-1, Bulandshahar, U.P.-203001 Bulandshahar, U. P.-203001 (APPELLANT) (RESPONDENT) PAN No. AAHCA2105J Assessee by: Dr. Rakesh Gupta, Adv., Sh. Somil Agarwal, Adv. & Sh. Saksham Agarwal, Adv. Revenue by: Sh. Akhilesh Yadav, Sr. DR Date of Hearing: 11.02.2026 Date of Pronouncement: 06.05.2026 ORDER Per Manish Agarwal, Accountant Member: The present appeal has been filed by the assessee against the order dated 24.01.2023 passed by Ld. Commissioner of Income Tax(A)/National Faceless Appeal Centre, Delhi [“Ld.CIT(A)/NFAC”] in DIN & order No. ITBA/NFAC/S/250/2022- 23/1049048155(1) passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 30.03.2013 passed u/s 143(3) of the Act pertaining to Assessment Year 2010-11.

2.

Brief facts of the case are that the assessee is engaged in the business of wholesale and retail trading of wine. The return of income was e-filed on 23.03.2011 declaring total income of

2 ITA No. 638/Del/2023 ASR Wines (P) Ltd. Rs.25,380/-.The case was selected for scrutiny and the AO observed that assessee has received share application money of Rs.2,04,14,000/- during the year under appeal, out of which total sum of Rs.65,14,500/- were deposited in cash in the bank accounts of various share applicants just prior to the issue of cheques to the assessee as share application money. Thus, the AO has made the addition of Rs.65,14,500/- being the cash deposited in the bank account of the share applicants immediately before the issue cheques as unexplained credits u/s 68 of the Act.

3.

Against the said order, the assessee filed appeal before ld. CIT(A) who confirmed the findings of the AO and dismissed the appeal of the assessee.

4.

Aggrieved by the said order, the assessee is in appeal before the tribunal by taking the following grounds of appeal: “1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an aggregate addition of Rs.65,14,500/- by treating it as alleged income from undisclosed sources u/s 68 and that too by recording incorrect facts and findings and without observing the principles of natural justice and by disregarding the submissions, evidences and material placed on record by theassessee. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making an aggregate addition of Rs.65,14,500/- by treating it as alleged income from undisclosed sources u/s 68, is bad in law and against

3 ITA No. 638/Del/2023 ASR Wines (P) Ltd. the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds. 3. That in any case and in any view of the matter, the impugned assessment order passed by Ld. AO dated 30-03-2013 and the impugned addition made therein are illegal, bad in law, void ab-initio and against the facts and circumstances of the case and in gross violation of principles of natural justice and barred by limitation also and not sustainable in law. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234A, 234B and 234D of the Income Tax Act.” 5. Before us, in support of all the grounds of appeal, ld. AR of the assessee submits that the assessee during the course of assessment proceedings had filed all the necessary details in order to establish the genuineness of share application money received such as copy of ITR, bank statement, ID cards of the share applicants and it is stated in all the cases application money was received through banking channel. Ld. AR submits that during the course of assessment proceedings some of the applicants appeared physically and they were examined by the AO and their statement were recorded wherein they have been accepted making payments towards the share application to the assessee company. All these details were available in the paper book filed by the assessee. Ld. AR further filed detailed written submission with respect to each individual share applicant from whom part of funds received were alleged as unexplained

4 ITA No. 638/Del/2023 ASR Wines (P) Ltd. credits and submits the details filed in support of the application money received and requested that the addition made be deleted. Ld. AR further placed reliance on the decision of co-ordinate bench of ITAT Delhi in the case of Ashwini Kumar Taneja Vs. ITO in ITA No. 7391/Del/2019 wherein it is held that for the purpose of section 68 of the Act, if the identity of the creditors have been established and Revenue accept the genuineness of part of the transaction, it is not justified to disbelieve the remaining part of the transaction by mere attribution of suspicion. Ld. AR further placed reliance on the judgment of hon’ble Bombay high court in the case of CIT Vs. Gagandeep Infrastructure (P) Ltd. (2012) 394 ITR 680 (Bom.) and Mumbai bench of Tribunal in the case of M/s J. R. Fiber Glass Industries Pvt. Ltd. Vs. NFAC, ITA No. 2848/Mum/2023. He prayed accordingly.

6.

On the other hand, ld. Sr. DR vehemently supported the orders of the lower authorities and submits that the AO has after examining the bank accounts of all the share applicants has observed that out of total share application money received of 2,04,14,000/-, a sum of Rs.60,14,500/- were deposited by the respective applicants in their bank accounts in cash, the source of which were not explained. Therefore, the AO made the addition u/s 68 of the Act for the said sum and accepted the remaining money received through banking channels out of

5 ITA No. 638/Del/2023 ASR Wines (P) Ltd. the balances available in their accounts as explained. He submits that the AO has very reasonable in making the addition to the extent of the sum, source of which remained unexplained on the part of the assessee/ respective share applicants and thus prayed for the confirmation of the orders of lower authorities.

7.

Heard the parties and perused the material available on record. In the instant case, assessee company had received share application money from total 34 independent individuals. The AO observed that during the course of assessment proceedings, the confirmations were filed from which it was observed that out of 34 persons, many of the persons are having same address. However, when the circle inspector was appointed to visit and examine these persons, it was found that they were not available at the given addresses. The AO further observed that most of share applicants were the resident of Bijnor district, however, their bank accounts were opened in Bulandshahr and most the accounts were introduced by the directors of the assessee company. The AO further observed that cash was deposited in their bank accounts immediately before the issue of cheques to the assessee and the pay-in- were filled-in by the employees of the authorized persons of the director of assessee company which fact remained uncontroverted. The AO at page 4 & 5 of the order made a

6 ITA No. 638/Del/2023 ASR Wines (P) Ltd. table wherein the source of income of each individual applicant is stated coupled with the amount invested as share application. It is further observed that in many cases cash was deposited in the bank accounts of the share applicants and immediately after deposit of cash, cheques were issued to the assessee company. Before us, ld. AR for the assessee, though filed the copies of bank statements, confirmations, their ITR etc. however, nowhere in the said of details filed before the lower authorities, immediate source of the cash so deposited in their bank accounts was explained. It is observed that the AO had accepted the funds to the extent received from these applicants, immediate source of which is duly backed by bank entry/ availability of funds in the bank account of respective individual. It is further observed that all these persons are showing income ranging between Rs.1.50 lakhs to 2.5 lakhs. However, they had made share application of 3 lakhs to 8 lakhs which is tabulated as under: Amount(Rs.) S. No. Name Statement of the Total share Disallowed amount Amount of share Shareholder capital accepted recorded on Oath application of share capital as money received received from alleged undisclosed source 1 Abdul Aziz 4,75,000.00 1,99,000.00 2,76,000.00 2 Achchan Khan 4,35,000.00 1,99,000.00 2,36,000.00 3 Akram Khan 4,75,000.00 1,94,000.00 2,81,000.00 recorded on 08.03.2013 4 Asif Ali 5,00,000.00 1,97,000.00 3,03,000.00 5 Gulfam Ali 5,10,000.00 1,90,000.00 3,20,000.00 6 Narendra 5,03,000.00 1,92,000.00 3,11,000.00 Kumar Jaiswa 7 Sonu Singh 6,96,000.00 2,08,000.00 4,88,000.00 recorded on 15.03.2014

7 ITA No. 638/Del/2023 ASR Wines (P) Ltd. 8 Smt. Pawan Devi 4,50,000.00 1,84,000.00 2,66,000.00 recorded on 08.03.2013 9 Beerbal Singh Bhati 4,00,000.00 1,80,000.00 2,20,000.00 10 Devendra 4,21,000.00 2,00,000.00 2,21,000.00 recorded on Sharma 12.03.2013 11 Jagdish 3,25,000.00 2,00,000.00 1,25,000.00 recorded on Sharma 15.03.2014 12 Irshad Alam 5,00,000.00 1,91,500.00 3,08,500.00 recorded on 11.03.2014 13 Zahid Ali 15,00,000.00 1,95,000.00 13,05,000.00 recorded on 06.03.2014 Manoj Kumar 4,25,000.00 1,98,000.00 2,27,000.00 15 Laia Ram 6,65,000.00 2,00,000.00 4,65,000.00 recorded on 08.03.2014 16 Maiku Lal 4,25,000.00 1,85,500.00 2,39,500.00 recorded on 12.03.2013 17 Smt. Mehnaz 4,50,000.00 1,95,500.00 2,54,500.00 recorded on Ahmad 11.03.2014 18 Mubeen Khan 6,25,000.00 2,00,000.00 4,25,000.00 recorded on 12.03.2013 19 Parmatma Saran 4,25,000.00 2,00,500.00 2,24,500.00 20 Rafiq Ahmad 4,02,000.00 1,71,500.00 2,30,500.00 21 Rakesh 5,55,000.00 1,96,000.00 3,59,000.00 recorded on Kumar s/o Jaiveer Singh 15.03.2013 22 Rakesh s/o 4,01,000.00 1,80,000.00 2,21,000.00 recorded on Shyam Lal 12.03.2013 23 Ram Avtar 4,15,000.00 1,74,000.00 2,41,000.00 recorded on 08.03.2013 24 Shahid Ali 8,88,000.00 1,97,500.00 6,90,500.00 recorded on 06.03.2014 25 Sikander Ali 7,43,000.00 1,79,500.00 5,63,500.00 26 Sujat Khan 4,25,000.00 2,09,000.00 2,16,000.00 27 Sushil Kumar 6,50,000.00 2,05,000.00 4,45,000.00 Karanwal 28 Sudha Rani 8,25,000.00 1,73,000.00 6,52,000.00 29 Chooti Begum 30,80,000.00 8,20,000.00 22,60,000.00 30 Naseem Bano 8,05,000.00 3,00,000.00 5,05,000.00 31 Ramkhilari 1,80,000.00 ACCEPTED 1,80,000.00 32 Ran Singh 1,20,000.00 ACCEPTED 1,20,000.00 33 Satish Chand 2,20,000.00 ACCEPTED 2,20,000.00 Rubeena Parveen 5,00,000.00 ACCEPTED 5,00,000.00 34 TOTAL 2,04,14,000.00 65,14,500.00 1,38,99,500.00

8.

From the above table, it is evident that the AO has accepted that the application money which was duly backed by the bank credits in the accounts of respective applicants and the cases where cash deposited in the bank accounts of

8 ITA No. 638/Del/2023 ASR Wines (P) Ltd. applicants immediately before the issue of cheques and source of which were not explained, has been held as unexplained credits and made the addition u/s68 of the Act.

9.

The judgement relied upon the assessee of eh Co-ordinate bench in the case of Ashwini Kumar Taneja (supra)wherein it is held that when part funds were accepted, no addition could be made for the remaining amount on mere suspicion however, the facts of that case are totally distinguishable as in that case, funds were received from all the persons through banking channels and immediate source in their bank accounts were also from the banking channel. Whereas in the present case, admittedly cash was deposited immediately before the funds transferred to the assessee and the AO has made the addition for those funds only therefore, the ratio laid down by the coordinate bench is not applicable to eh facts of the present case.

10.

In the case of the share application money, burden is on the assessee to prove the source in the hands of the applicants which in the instant case has not been proved to the extent the cash deposited in the bank accounts of respective applicants.

11.

In view of the above discussion, we are in agreement with the order of ld. CIT(A) which is hereby upheld. Accordingly, all the grounds of the appeal of the assessee are dismissed.

9 ITA No. 638/Del/2023 ASR Wines (P) Ltd.

12.

In the result, the appeal of the assessee is dismissed. Order Pronounced in the Open Court on 06/05/2026. Sd/- Sd/- (Anubhav Sharma) (Manish Agarwal) Judicial Member Accountant Member Dated: 06/05/2026 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

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