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Facts
The assessee, Lime Fresh Properties Pvt. Ltd., received share capital and premium amounting to ₹69 lacs from 7 related entities. The Assessing Officer (AO) made an addition of ₹69 lacs under Section 68 as unexplained cash credit, which was upheld by the CIT(A). The assessee had furnished extensive evidence regarding the identity, creditworthiness, and genuineness of these transactions, but the AO and CIT(A) disregarded them. A 107-day delay in filing the appeal was condoned due to the accounts in-charge's illness.
Held
The Income Tax Appellate Tribunal found that the assessee had provided sufficient evidence, including PANs, bank statements, audited accounts, and justification for the funds (property purchase, bank loan margin money), to prove the identity and creditworthiness of the investors and the genuineness of the transactions. The Tribunal concluded that the AO and CIT(A) had cryptically upheld the addition without proper consideration of the evidence. Therefore, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition of ₹69 lacs.
Key Issues
Whether the addition of ₹69 lacs as unexplained cash credit under Section 68 for share capital and premium was justified, despite the assessee providing evidence for the identity, creditworthiness of investors, and genuineness of the transactions.
Sections Cited
68, 131, 133(6), 142(1), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 13.03.2024 for the AY 2012-13.
At the outset, we observe from the facts on file that there is a delay of 107 days in filing the appeal by the assessee for which the assessee has moved condonation application along with affidavit dated 26.08.2024. The assessee submitted that Shri Kailash Chandra Soni, director of M/s Lime Fresh Properties Private Limited submitted has stated in the affidavit that Mr. Tapas Roy was entrusted with the accounts, taxation matters of the company including filing the appeal on behalf of the company. However, he was suffering from severe viral infection during the month of April, 2024 and therefore due to his
The ld. DR on the other hand opposed the arguments of the ld. AR on condonation.
After hearing the rival contentions and perusing the materials available on record, we find that the delay in filing the appeal is for bonafide and sufficient reasons and therefore, same is condoned by admitting the appeal for adjudication.
The only issue raised by the assessee is against the confirmation of addition of ₹69 lacs by the ld. CIT (A) as made by the ld. AO on account of unexplained cash credit u/s 68 of the Act.
The facts in brief are that the assessee filed the return of income on 29.09.2012, declaring total income of ₹2,62,465/-. The case of the assessee was selected for scrutiny and the statutory notices and other notices along with questionnaire were issued. During the course of assessment proceedings, the assessee filed all the evidences/ details as called for by the ld. Assessing Officer. The ld. AO also issued notice u/s 131 of the Act which was duly replied. Thereafter, the ld. AO issued notices u/s 133(6) of the Act to the share subscribers, which were also duly replied by the share subscribers. The notice u/s 142(1) of the Act dated 08.12.2014, was replied vide written submissions dated 16.12.2014 and 30.12.2014 by furnishing various details/ evidences, which are available from page no.16 to 22 of paper book. Similarly, the summon issued u/s 131 of the Act on 23.02.2015, to the assessee was complied with vide written submission dated
In the appellate proceedings, the ld. CIT (A) passed a very cryptic order upholding the order of ld. AO without considering the reply of the assessee and evidences filed on line during the course of appellate proceedings for which the assessee place evidences before the tribunal.
After hearing the rival contentions and perusing the materials available on record, we find that the assessee has raised share capital/ share premium from 7 entities/ persons. The ld. AO during the course of assessment proceedings issued notice u/s 142(1) of the Act along with questionnaire calleding for various information/ details from the assessee qua the said share capital/ share premium which were duly furnished by the assessee and copies of the documents are available from page no. 16 to 23 of the PB. Thereafter, in the second reply the assessee filed the justification for raising such money from the group entities/ family members as the same was required for purchase of property and also as per the requirement of bank to disburse the loans some margin money was required on the part of the assessee. The documents are available at page no. 24 to 82 of the PB. We also note that the ld. AO issued summon u/s 131 of the Act to the issue requisitioning the details of share capital vide notice dated
In the result, the appeal of the assesseeis allowed.
Order pronounced in the open court on 25.03.2025.