ADITYA REAL BUILD PVT. LTD.,NEW DELHI vs. ITO, WARD- 1(3), NEW DELHI

The appeal and the stay application relating to the assessee were heard together and are being disposed of by this consolidated order for the sake of convenience.

The assessee is aggrieved by the addition of Rs.30,54,000/-. The appeal has been filed after a delay of 24 days. The assessee has moved an application for condonation of delay and after perusing the same, the delay of 24 days is condoned and appeal is being adjudicated after hearing both the authorized representatives.

Briefly in the facts of the case, the assessee had furnished the return of income of Rs. 2,540/-. The AO received information from the Investigation Wing that Shri. S.K. Jain was providing accommodation entries and the name of the assessee company also figured in the list of beneficiaries of share capital premium / loan. The said information was consequent to search and seizure on premises of Shri. S.K. Jain. Consequent to the information received from Investigation Wing, the AO recorded reasons for reopening the assessment and issued notice under section 148 of the Act. In reply, the assessee submitted that the return of income earlier filed by it should be treated as filed in response to 2

SA No. 437/Del/2019 notice under section 148 of the Act. Thereafter, notice under section 143(2) was issued to the assessee. The AO on the analysis of the various documents relating to the Jain brothers concluded by making an addition of Rs. 30,00,000/- under section 68 of the Act. Further the addition of Rs. 54,000/- was made on account of commission on the said transaction. The CIT(A) upheld the order of AO against which the assessee is in appeal before us.

The learned AR for the assessee pointed out that before the AO admittedly no reply was filed to the show cause notice and he further stated that the assessee company was floated during the preceding year and the aforesaid addition was not warranted in the hands of the assessee under section 68 of the Act.

The learned DR for the Revenue pointed out that the assessee was a private limited company and had alleged to have received premium on 18 Lacs. He further stressed that creditworthiness of the persons from whom share application plus premium was received had to be established but the assessee had failed to do so. He further placed reliance on the ratio laid down by the Hon’ble Supreme Court in Principal Commissioner of Income-tax (Central)-1 vs. NRA Iron & Steel (P.) Ltd,.

On the perusal of the record and after hearing both the authorized representatives, the issue which arises in the present appeal is in relation to the alleged share application and premium received by the assessee company. The assessee is a company with paid up capital of SA No. 437/Del/2019 Rs. 1,00,000/- which admittedly was floated in the preceding year.

In this regard, the Supreme Court in Principal Commissioner of Income-tax (Central)-1 vs. NRA Iron & Steel (P.) Ltd,. (supra) has laid down the proposition that where there was failure of assessee to establish credit worthiness of investor companies, Assessing Officer was justified in passing assessment order making additions under section 68 for share capital/premium received by assessee company. Merely because assessee company had filed all primary evidence, it could not be said that onus on assessee to establish credit worthiness of investor companies stood discharged.

In view thereof, we uphold the addition made under section 68 of the Act for share capital and premium received by the assessee

Consequent to the decision of the appeal in the case of the assessee, the stay application is also dismissed.

In the result, both appeal and stay application of the assessee are dismissed.