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Facts
The Revenue appealed against the CIT(A)'s order deleting an addition of ₹2,05,00,000/- made by the AO on account of unexplained cash credit. The assessee had issued shares at a premium to a sister concern, and the AO added the amount as unexplained. The CIT(A) deleted the addition after considering evidence and a remand report.
Held
The Tribunal held that the amendment to Section 68 of the Income Tax Act, 1961, regarding proving the source of share capital, is prospective and applicable from AY 2013-14 onwards. For AY 2012-13, the assessee is not required to prove the source of source, and the evidence provided demonstrated the identity and creditworthiness of the investors.
Key Issues
Whether the amendment to Section 68 of the Income Tax Act regarding proof of source of funds for share capital is retrospective or prospective? Whether the assessee has adequately discharged its onus to prove the genuineness and creditworthiness of the share transactions for AY 2012-13?
Sections Cited
68, 131
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, KOLKATA
This is an appeal preferred by the Revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 26/05/2023for the AY 2012-13.
At the outset, we note that there is a delay of 3026 days in filing the appeal by the Revenue. For this condonation petition was filed. It was stated in the condonation petition that the order of the ld. CIT (A) is neither communicated nor any alert on passing of the appellate order by the ld. CIT (A) was sent either by SMS or on email or through any other mode of departmental system of network, therefore the order could not be accessed. The condonation petition further states that the order of ld. CIT (A) was downloaded from the departmental system of
The ld. AR on the other hand, left the issue on the wisdom of the Bench.
After hearing the rival contentions and perusing the materials available on record, we find that there is a long delay of 3026 days in filing the appeal by the Revenue, due to non-service of appellate order and also not issuing any alert for passing of appellate order either through SMS or through email or any other mode or departmental system of network. In our opinion the revenue is a government department which is manned by the Government officials in the departmental hierarchy and the file has to go through various stages. Considering the above facts and circumstances and the reasons cited to be genuine and bonafide, we condone the delay in filing the appeal.
The only issue raised by the Revenue is against the deletion of addition of ₹2,05,00,000/- by ld CIT(A) as made by the ld. AO on account of unexplained cash credit u/s 68.
The facts in brief are that the assessee filed the return of income on 29.09.2012, declaring the total income of ₹28,174. The case of the assessee was selected for scrutiny through Computer Assisted Scrutiny Selection (CASS). The statutory notices were duly served upon the assessee along with questionnaires. The assessee furnished
In the appellate proceedings the ld. CIT (A) allowed the appeal of the assessee after taking into consideration the reply/evidences filed by the assessee during the course of appellate proceedings. The ld. CIT (A) called for the remand report from the ld. AO which was duly submitted by the ld. AO before the ld. Commissioner of Income-tax (Appeals). It was submitted that inspector of the department was deputed to visit the subscribers place and found that the address of the investor to be correct which has been mentioned by the ld. CIT (A) at page no.9 para 3 as a part of remand report was extracted by the ld. CIT (A) on para 5 page no.8 and 9 of the ld. CIT (A)’s order. Thereafter, the ld. CIT (A) called for the reply of the assessee on the remand report which was also extracted in Para 6 page 9 to 11 of the appellate order. Finally, the ld. CIT (A) deleted the addition by observing and holding as under:-
“7.0 I have considered the order passed by the Ld AO, appellant’s reply, remand report and the rejoinder to the remand report. The appellant has raised the share capital of Rs 2,05,00,000/- from its sister concern, M/s Memori Sales Pvt Ltd. Further, M/s Memori Sales Pvt Ltd has received back refund of the loan
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 21.01.2025.