CIT vs. F-SEVEN PHARMACEUTICALS PVT LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . 27.05.2011 . Present: Mr.Sanjeev Sabahrwal, Advocate for the appellant. . +ITA No.777/2011 . The addition of `30.00 lakhs as unexplained income under Section 68 of the Income Tax Act has been deleted by the CIT(A), which order is confirmed by the Income Tax Appellate Tribunal (ITAT). The addition was made on the sale of shares and according to the Assessing Officer, the assessee had failed to discharge its onus by not showing the identity, credit-worthiness and genuineness of the persons from whom the amount was received. The CIT(A) allowed the appeal holding that there was sufficient evidence on record to come to the conclusion that various amount represented sale proceeds and all the buyers were assessed to tax and filed various documents to prove that they had automatically made purchases of shares and accordingly the addition was deleted. The ITAT while confirming this finding of the CIT(A) has observed as under: ?5. We have considered the facts of the case and submissions made before us. The facts are that the assessee had shown investment in the shares of K.V. Finelease Securities (P) Ltd. In the annual accounts for the period ended on 31.03.2001. It showed the sale of shares in this year. Out of six companies, to whom shares were sold, Maestro Marketing and Advertising (P) Ltd. attended through direction and filed various . . details. Elaborate evidence was filed in respect of other parties to establish their existence . . ITA No.777/2011 Page 1 of 2 and receipt of sale proceeds through banking channels. The Assessing Officer did not verify the evidence submitted by the assessee. The purchase in earlier year has not been doubted. As in the case of Vishal Holding and Capital (P) Ltd., he proceeded to make assessment on the basis of information received from the Investigation Wing without verifying the details furnished by the assessee. Therefore, the ratio of that case is applicable to the facts of this case. Accordingly, we are of the view that the learned CIT(A) was right in deleting the addition on proper appreciation of evidence filed by the assessee.? . No question of law arises and the appeal is accordingly dismissed. . . A.K. SIKRI, J. . . . . MAY 27, 2011 M.L. MEHTA, J. Dev . . . . . . . . . . . . . . . ITA No.777/2011 Page 2 of 2 . . #2