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Facts
For Assessment Year 2015-16, the Assessing Officer added Rs. 4,13,50,000/- to the assessee's income under section 68 as unexplained share capital. The CIT(A) subsequently deleted this addition, leading the Department to appeal to the Income Tax Appellate Tribunal.
Held
The Tribunal affirmed the CIT(A)'s decision, concluding that the assessee had sufficiently discharged its onus under section 68 by providing extensive documentation for the share capital transactions. This documentation included investor confirmations, bank statements, ITRs, and ROC records, proving the genuineness and creditworthiness of the investors.
Key Issues
Whether the assessee successfully discharged its onus under Section 68 of the Income Tax Act regarding unexplained share capital received, establishing the genuineness of transactions and creditworthiness of investors.
Sections Cited
Section 68, Section 143(3), Section 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI S RIFAUR RAHMAN & SHRI VIMAL KUMAR
INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 1913/Del/2019 Asstt. Year: 2015-16 ITO, Ward-19(4) Vs. M/s. Pioneer Factor Room No. 209, Developers Pvt. Ltd. C.R. Building, 5th Floor, Padma Palace, New Delhi. 86, Nehru Place, New Delhi – 110 019 PAN AAECP3203B (Appellant) (Respondent)
Assessee by: Shri Gautam Jain, Advocate Shri Path Singhal, Advocate Department by: Ms. Mayuri, Sr. DR Date of Hearing: 25.04.2024 Date of 06.05.2024 pronouncement: O R D E R PER VIMAL KUMAR, JM
The appeal is against order dated 18.12.2018 of the Learned Commissioner of Income Tax (Appeals) through which assessment order dated 8.12.2017 of the Learned Assessing Officer addition of Rs. 4,13,50,000/- was added in the income of assessee company due to failure and discharging its onus under section 68 of the Income Tax Act, 1961.
Brief facts of case are that assessee M/s. Pioneer Factor IT Infradevelopers Pvt. Ltd. e-filed its return on 25.09.2015 for the assessment year 2015-16 declaring NIL income, The case was selected for scrutiny under CASS. Order under section 143(3)
was passed on 8.12.2017 assessing income as Rs. 4,13,50,000/- under section 68 on account of unapproved share capital i.e. unexplained cash credit. Assessee preferred appeal before Learned CIT(A) which was partly allowed deleting addition of Rs. 4,13,50,000/-. 3. Being aggrieved appellant Department preferred appeal. 4. Learned Departmental Representative submitted that Learned CIT(A) erred in law and fact in deleting addition of Rs. 4,13,50,000/- made by Learned Assessing Officer on account of unexplained share capital received from Snt. Kalawati Devi Jain, Smt. Sunaina Devi, Shri Ram Sewak Gupta and M/s. Pioneer Procon Pvt. Ltd. despite the fact that the assessee was not able to prove the genuineness of transactions and their creditworthiness of creditors as required under section 68 of the Income Tax Act. 5. Learned Representative for assessee submitted that in pursuance to notice under section 133(6) Smt. Kalawati Devi Jain, Smt. Sunaina Devi, Shri Ram Sewak Gupta submitted replies confirming subscription in preference share capital of assessee company, independently and had furnished their respective bank statements duly reflecting the source of their investments and ITR etc. The assessee company had duly furnished complete details and corroborating evidences in the shape of confirmations, PAN, income tax particulars, addresses, share certificates, ROC records. Learned Assessing Officer had made addition on the sole basis of low amount of returned
income of the 4 investor entities and doubted their creditworthiness. So appeal may be rejected.
From examination of record in light of aforesaid rival contentions it is crystal clear that Learned Assessing Officer noticed that Smt, Kalawati Devi Jain, Smt. Sunaina Gupta, Shri Ram Sewak Gupta, M/s. Pioneer Procon (P) Ltd. having very low income and as such having no creditworthiness to provide share capital to assessee company mad made addition of Rs. 4,13,50,000/-. Learned CIT(A) on basis of submissions tabulated in detail in relation to nature and source of funds made by Smt. Kalawati Devi Jain, Smt. Sunaina Gupta, Shri Ram Sewak Gupta and M/s. Pioneer Procon (P) Ltd. as under:-
Investor Entities & Date of Sources of Fund Amount of Nature of their Relationship Receipts of Share Transaction with Assessee Fund Subscription Company Smt. Kalawati Devi 27.03.2015 Pioneer Securities 50,00,000/- Recovery of Jain, Mother of (P) Ltd. Own Fund Director of Assessee Company Smt. Sunaina 27.03.2015 Rajiv Kumar, 1,50,15,000/- Recovery of Gupta, Close Husband of Own Fund Friend of Director Sunaina Gupta, of Assessee promoter of Company Bakemans Biscuits & 49,85,000/- Loan Taken Factory Sh. Ram Sewak 27.03.2015 Pioneer Securities 1,21,00,000/- Recovery of Gupta, Close (P) Ltd. Own Fund Friend of Director of Assessee Company M/s Pioneer Procon 27.03.2015 Pioneer Securities 42,50,000/- Recovery of (P) Ltd., Sister (P) Ltd. Own Fund Concern of Assessee Company Total 4,13,50,000/-
The above factual position was corroborated by bank statement investors. None of the four investor entities were having any blemished track record of entry operators. All four were regular income tax assessees filing ITRs. The four investors had provided statutory records like audited financial statements, ITR, Confirmation, Bank Statements, Share Certificates, ROC Records and the independent confirmation so the onus had shifted back to the Learned Assessing Officer resultantly the addition of Rs. 4,13,50,000/- was found to be unsustainable. In view of above material facts and circumstances the findings of Learned CIT(A) are just, fair, reasonable and deserve to be upheld. The arguments of Departmental Representative being devoid on merit are unsustainable. 8. No other point was argued. 9. In the result appeal is dismissed.
Order pronounced in the open court on 6th May, 2024.
sd/- sd/- (S RIFAUR RAHMAN) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 06/05/2024 Veena Copy forwarded to - 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT 4
ASSISTANT REGISTRAR ITAT, New Delhi Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order