COMMISSIONER OF INCOME TAX vs. XENIAL INVESTMENT PVT LTD

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ITA - 580 / 2010HC Delhi10 May 20101 pages
For Petitioner: SANJEEV SABHARWAL
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises for its consideration. The Tribunal had correctly noted that the assessee had discharged its onus by obtaining confirmations from the sixteen individuals who had applied for shares. These individuals had also provided their income tax returns and bank statements in response to notices issued under Section 133(6) of the Income Tax Act, 1961. The Tribunal's reliance on the Supreme Court's decision in CIT v. Lovely Exports Pvt. Ltd. was found to be appropriate. Consequently, the Tribunal's order upholding the deletion of the Rs. 17 lakhs addition made by the Assessing Officer was affirmed. The appeal filed by the Commissioner of Income Tax was dismissed.

What were the facts?

The appeal by the Commissioner of Income Tax (Appellant) is against the order dated 26.06.2009 passed by the Income Tax Appellate Tribunal (ITAT) in Appeal No. 3141/Del/2008 for the assessment year 2005-2006. The ITAT had upheld the deletion of an addition of Rs. 17 lakhs made by the Assessing Officer. This addition represented share application money allegedly received from sixteen individuals. The Assessing Officer had issued notices under Section 133(6) of the Income Tax Act, 1961, to these individuals. In response, they confirmed their subscription to the share capital and provided copies of their income tax returns and bank statements. The ITAT concluded that the assessee had discharged its onus.

What were the issues?

1. Whether the Tribunal erred in law in deleting the addition of Rs. 17 lakhs made by the Assessing Officer on account of share application money, when the said amount was allegedly received from sixteen individuals? (Question of law) Assessee's Contention: The assessee argued that the onus to prove the genuineness of the share application money was discharged by providing confirmations from the subscribers, their income tax returns, and bank statements. The assessee relied on the Supreme Court's decision in CIT v. Lovely Exports Pvt. Ltd. (2008) 216 CTR 195. Revenue's Contention: The revenue contended that the addition made by the Assessing Officer was justified. The judgment does not record specific arguments made by the revenue before the High Court, but the appeal itself implies disagreement with the ITAT's deletion of the addition.

Which sections of the Income-tax Act were involved?

Section 133(6)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 580/2010 . . COMMISSIONER OF INCOME TAX ..... Appellant Through Mr Sanjeev Sabharwal . versus . . XENIAL INVESTMENT PVT LTD ..... Respondent Through Mr R.P.Goel for Mr K.Sampath . . CORAM: HON'BLE MR JUSTICE BADAR DURREZ AHMED HON'BLE MR JUSTICE V.K. JAIN . O R D E R 10.05.2010 This appeal is directed against the order dated 26.6.2009 passed by the Income Tax Appellate Tribunal in Appeal No.3141/Del/2008 relating to the assessment year 2005-2006. The issue raised before the Tribunal was that the Commissioner of Income Tax (Appeals) had erred in deleting the addition of Rs 17 lakhs which had been allegedly received as share application money from sixteen . . individuals. The Tribunal noted that the notices had been sent to the said sixteen persons by the Assessing Officer under Section 133(6) of the Income Tax Act, 1961. In response thereto, the said persons had confirmed having subscribed to the share capital. They had also filed copies of their income tax returns and their bank statements etc. Consequently, the tribunal came to the conclusion that the onus which lay upon the assessee had been discharged. Relying upon the decision of the Supreme Court in the case of CIT v. Lovely Exports Pvt. Ltd.: 216 CTR 195, the tribunal upheld the order passed by the Commissioner of Income Tax (Appeals) and deleted the addition of Rs 17 lakhs made by the Assessing Officer. No substantial question of law arises for the consideration of this court. The appeal is dismissed. . BADAR DURREZ AHMED, J . . . V.K. JAIN, J May 10, 2010 ?sn? . . $ 6

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