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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
ITA no. 5719/M/2015 is filed by Rikosh fashions private limited (the appellant /assessee) for A.Y. 2011–12 against the order of the Commissioner of income tax (appeals) – 21, Mumbai [the learned CIT(A)] dated 14th March, 2016 raising the following grounds of appeal:-
“1. on the facts and circumstances of the case as well as in Law, the learned CIT (A) has erred in confirming the action of learned assessing officer in adding a sum of ₹ 450 lakhs u/s 68 of the income tax act 1961 without considering the facts and circumstances of the case
During the year assessee has received dividend income of ₹ 303,250/– assessee was asked to explain about the disallowance under Section 14A of the Act. The assessee did not file any response. Therefore the learned assessing officer invoke the provisions of Rule 80 and made a disallowance of ₹ 451,927/–. Accordingly the assessment order was passed on 31/3/2014 under Section 143 (3) of the Act, determining total income of the assessee at ₹ 32,435,164/– against the loss of third in the return of income of ₹ 13,016,763.
The assessee aggrieved with that preferred an appeal before the learned CIT(A), who confirmed the addition with respect to the share capital for following reasons:-
i. During the current year assessee company had issued 3,72,500 shares for a premium of ₹ 190 per share and accordingly receive ₹ 3,725,000 on account of share capital and ₹ 70,775,000 on account of share premium. ii. Assessee is merely doing job work activities iii. The assessee is incurring continuous losses in subsequent two years.
The learned departmental representative vehemently supported the order of the lower authorities.
We have carefully considered the contentions of the learned departmental representative as well as the written submission made by the assessee on 8th July, 2019 which is available on record. In its return submission assessee has merely relied upon several judicial precedents however did not produce any evidence with respect to the creditworthiness and genuineness of the depositors. According to the provisions of Section 68 of the Act, it is the duty of the assessee to show if any sum is credited in the books of accounts, the nature and source of such credit is by producing relevant details such as identity of the depositors, creditworthiness of the depositors and genuineness of the transaction of depositing such sum. The assessee has failed to demonstrate the same before the lower authorities. In view of this we do not find any infirmity in the order of the learned that lower authorities in confirming the addition of ₹ 450 lakhs under Section 68 of the Act. Accordingly ground no. 1 of the appeal of the assessee is dismissed.
The ground no. 2 is with respect to the disallowance under Section 14 A of the income tax Act. During the year the assessee has received exempt income of ₹ 303,250/–. The learned CIT(A) restricted the addition/disallowance only with respect to the administrative expenditure at the rate
In the result, appeal filed by the assessee is dismissed.
Order pronounced in the open court on 26.08.2022.