MATRA KAUSHAL ENTERPRISES LTD.,SECUNDERABAD vs. ACIT, CENTRAL CIRCLE- 3, NEW DELHI

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ITA 1010/DEL/2018Status: DisposedITAT Delhi15 October 2019AY 2013-143 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to discharge the initial onus of proving the identity, creditworthiness, and genuineness of the share capital transaction. The High Court's order of amalgamation did not absolve the assessee of this responsibility.

What were the facts?

The assessee company received Rs. 25 lakhs as share capital from another company. The assessee failed to provide any confirmation or details regarding the investor company, which was found to be unavailable at the given address. The assessee was also identified as a penny stock company.

What were the issues?

Whether the addition made by the AO on account of unexplained share capital under Section 68 is justified when the assessee fails to establish the identity, creditworthiness, and genuineness of the transaction.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “ C+SMC”: NEW DELHI

Before: SHRI PRASHANT MAHARISHI & SHRI K.N.CHARY

For Respondent: Ms. Rakhi Ulmal, Sr. DR
Hearing: 14/10/2019Pronounced: 15/10/2019

O R D E R PER PRASHANT MAHARISHI, A. M.

1.

This appeal is filed by the assessee against the order of the ld CIT(A)-4, Hyderabad dated 03.06.2016, wherein, the addition of Rs. 25 lakcs made by the ld AO u/s 68 of the Act on account of amount invested as share capital in the assessee company by another company.

2.

The brief facts of the case shows that the assessee is a company engaged in trading of Voltage Stablizer. It filed its return of income on 28.09.2013 declaring Nil income. It is assessed u/s 143(3) on 31.03.2016 @Rs. 25,00,000/-.

3.

The ld AO noted that M/s. Kaushalya Global Limited amalgamated with the assessee company by the order of Hon'ble High Court w.e.f 16.09.2012. The share capital of the amalgamated company got increased and the details were asked from the assessee. The investor company M/s. Gawaraja Merchants Pvt. Ltd having address of P-27, Prince Street, 3rd Floor, Kolkata invested Rs. 25 lacs in the share capital of the assessee company. On enquiry, it was found that at the address given, investor is not available. The assessee also admitted before the ld AO that they are not in a position to file any confirmation. Thus, the addition of Rs. 25 laks was made by the

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