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Facts
The assessee company declared 'Nil' income and was selected for scrutiny. The AO observed share application money of Rs. 1,22,61,800 from Shri R.K. Sharma. Despite queries, the AO concluded that the assessee failed to establish the genuineness of the transaction and added the amount as unexplained cash credit.
Held
The Tribunal held that the matter should be remanded back to the CIT(A) for adjudication afresh after examining the evidences filed by the assessee and further submissions. The CIT(A) was directed to give a necessary opportunity of hearing and pass an appropriate order.
Key Issues
Whether the addition of share application money under Section 68 is justified when the assessee claims to have produced further evidence and whether the matter should be remanded to CIT(A) for re-adjudication.
Sections Cited
143(3), 68, 234A, 234B, 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first-appeal dated 22.09.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 27.03.2014 passed by learned ITO-1(1), Bhopal [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2011-12, the assessee has filed this appeal on following grounds:
Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12
“1. That on the facts and in the circumstances of the case and in law the findings and the decision of the Ld. CIT(A) in sustaining the addition of Rs. 1,22,61,800/- u/s 68 are unlawful and unjustified and therefore the findings be quashed and it be held that the addition is unlawful and therefore be deleted.
2. That on the facts and in the circumstances of the case and in law it be held that the assessee had discharged its burden u/s 68 of the I.T. Act and therefore the addition of Rs. 1,22,61,800 and hence the addition of Rs. 1,22,61,800 be deleted.
3. That on the facts and in the circumstances of the case and in law it be held that sum of Rs. 1,21,61,800 do not represent in any manner the unexplained credit/ income of the assessee and therefore the addition of Rs. 1,22,61,800 be kindly deleted.
4. That on the facts and in the circumstances of the case and in law the levy of interest u/s 234A and 234B is unlawful and without jurisdiction and therefore be cancelled.”
The background facts leading to present appeal are such that the assessee-company filed its return of AY 2011-12 declaring a total income of Rs. Nil. The case of assessee was selected for scrutiny and statutory notices u/s 143(2)/142(1) were issued. During proceedings, the AO observed that the assessee-company received share application money of Rs. 1,22,61,800/- from Shri R.K. Sharma. In order to verifying genuineness of transactions, the AO made queries from assessee and also recorded statements of Shri R.K. Sharma u/s 131, the AO has re-produced statements in Para 4 of assessment-order. Shri R.K. Sharma stated to have taken loans from M/s Avinash Chalana & Co. for making investment in share capital of assessee. However, on verification of bank statement of Shri
Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12 R.K. Sharma, the AO observed that he received loans from M/s Gulmohar Traders and not from M/s Avinash Chalana & Co. The AO, therefore, being unsatisfied with explanation, concluded that the assessee-company had failed to establish genuineness of receipt of share application money.
Ultimately, the AO made an addition of Rs. 1,22,61,800/- as unexplained cash credit u/s 68 and completed assessment. Aggrieved, the assessee carried matter in first-appeal but did not get any success. Now, the assessee has come in next appeal before us.
Ld. AR for assessee at first submitted that the AO is correct in observing that Shri R.K. Sharma took loans from M/s Gulmohar Traders, there is no mistake in observation of AO. So far as Shri R.K. Sharma’s statement to have received loans from M/s Avinash Chalana & Co. is concerned, Ld. AR submitted that Shri R.K. Sharma took loans from multiple persons for making investment in multiple shares and there was a memory mistake as to the exact source for making investment in assessee- company. But the fact remains that Shri R.K. Sharma took loans through banking channel from M/s Gulmohar Traders and utilised the same for making investment in assessee. He submitted that there is nothing hidden, everything is clear-cut from bank statements of Shri R.K. Sharma and other documentary evidences.
Ld. AR next submitted that Shri R.K. Sharma expired on 28.08.2019 (death certificate is filed) and owing to that reason the assessee was not able to collect and submit evidences/documents of Shri R.K. Sharma to CIT(A)
Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12 during first-appeal which has led the CIT(A) to uphold the addition made by AO. However, the assessee has now collected all requisite evidences and filed the same by way of an Application under Rule 29 of Income-tax Appellate Tribunal Rules, 1963. The Application filed by assessee/Ld. AR is scanned and re-produced below:
B Page 4 of 12 Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12 Page 5 of 12 Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12 Page 6 of 12 Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12 Page 7 of 12 Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12 Page 8 of 12 Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12 Page 9 of 12 Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12 Page 10 of 12 Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12
Ld. AR submitted that the requisite evidences/documents are also filed at Pages 44 to 78 of Paper-Book and the assessee is further ready and willing to make a proper representation before CIT(A) if an opportunity is given and prays that the present matter should be remanded to the file of CIT(A) for a proper adjudication of the grounds/issues raised by assessee in first-appeal.
Ld. DR for revenue agrees with the prayer of Ld. AR but makes a request to direct the assessee to represent his case before CIT(A) and do not seek unnecessary adjournments.
In view of above submissions of parties; having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matter is restored at the level of CIT(A), we remand this matter back to the file of CIT(A) for adjudication afresh after examining of evidences filed by assessee and further submissions as may be made by assessee. Needless to mention that the CIT(A) shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by CIT(A) and do not seek unnecessary adjournments failing which the CIT(A) shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.
Aalok Deep Enrtainmnts Pvt. Ltd. - AY 2011-12
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 10/10/2025