THE ACIT, 5(1), INDORE vs. M/S. SITA HOMES PVT. LTD., INDORE

ITA 594/IND/2016Status: DisposedITAT Indore12 December 2017AY 2010-118 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, agreeing that the AO had not disputed the identity, genuineness, or creditworthiness of the share subscribers. The Tribunal noted that the CIT(A) had allowed the revenue to examine the source of investment in the hands of the subscribers.

What were the facts?

The Assessing Officer (AO) made an addition of Rs. 81,52,912/- on account of unexplained share application money, alleging a circular transaction where the assessee routed its own funds. The Commissioner of Income Tax (Appeals) deleted this addition, finding that the share applicants were relatives or friends who had previously advanced loans to the company and then invested the repaid amounts in shares.

What were the issues?

Whether the CIT(A) erred in deleting the addition made on account of share application money when the AO alleged circular transactions and routing of own funds. Whether the assessee failed to establish the identity, creditworthiness, and genuineness of share applicants.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCHE, INDORE

Before: SHRI KUL BHARAT & SHRI MANISH BORAD

For Respondent: Shri K. G. Goyal Sr. DR, Shri Piyush Mandovra, AR
Hearing: 05.12.2017Pronounced: 12.12.2017

PER KUL BHARAT, J.M: This appeal by the Revenue is directed against the order of Ld. Commissioner of Income Tax(Appeals)-II, Indore, (in short ‘CIT(A)’), dated 31.03.2016 for the A.Y. 2010-11. The revenue has raised following grounds of appeal:

“1. Whether the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.81,52,912/- made by the AO on account of unexplained share application u/s 68 of I.T. Act 1961 being alleged routing of own money and then carrying out

a circular transaction wherein share applicants were used as a conduit to increase appellant company’s capital.

2.

Whether in the facts and circumstances of the case the Ld. CIT(A) was right in de

The order continues below.

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