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Facts
The assessee's case was selected for scrutiny to examine the subscription of share capital, leading to an addition under Section 68 of the Income Tax Act, 1961. The Assessing Officer (AO) issued notices under Sections 131 and 133(6) and relied on an Inspector's report suggesting suspicious identity of the share-contributing companies. The assessee provided bank statements, accounts, and income-tax returns of shareholder companies, which the tax authorities found insufficient to establish identity, creditworthiness, and genuineness.
Held
The Income Tax Appellate Tribunal (ITAT) upheld the concurrent findings of the lower tax authorities, concluding that the assessee failed to discharge the burden of proving the identity, creditworthiness, and genuineness of the share capital subscription under Section 68. The Tribunal found no reason to interfere with the concurrent findings, noting the assessee's lack of efforts to rebut the presumption drawn by the AO based on the inquiry reports.
Key Issues
Whether the assessee successfully discharged the onus of proving the identity, creditworthiness, and genuineness of share capital received, in order to avoid an addition under Section 68 of the Income Tax Act, 1961.
Sections Cited
143(3), 144, 68, 131, 133(6), 131(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES: H :NEW DELHI
Before: SHRI G.S. PANNU, HON’BLE & SHRI ANUBHAV SHARMA
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: H :NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE VICE PRESIDENT AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.368/Del/2021 Assessment Year: 2012-13 Purus Builders Private Ltd., Vs ITO, A-404, Mayfair Apartment, Ward-20(2), Plot No.96, New Delhi. Patpar Ganj, New Delhi – 110 092. PAN: AAECP1713C (Appellant) (Respondent) Assessee by : None Revenue by : Shri Sumesh Swani, Sr. DR Date of Hearing : 23.01.2024 Date of Pronouncement : 23.01.2024 ORDER PER ANUBHAV SHARMA, JM: This appeal is preferred by the Assessee against order dated 26.08.2020 of the Commissioner of Income Tax (Appeals), Delhi-36 (hereinafter referred as Ld. First Appellate Authority or in short ‘the Ld. FAA’) in appeal No.CIT(A), Delhi-36/10130/2016-17 arising out of the appeal before it against the order dated 27.03.2015 passed u/s 143(3)/144 of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ITO, Ward-20(2), New Delhi (hereinafter referred to as the Ld. AO).
ITA No.368/Del/2021
As the case was called for hearing, none has appeared for the assessee. Record shows that notices have been issued repeatedly and also representative have appeared and sought adjournment. None has appeared today. No notice is justified. The ld. DR was heard who supported the findings of the ld. tax authorities below.
Appreciating the material on record, it comes that to examine the subscription of share capital during the year, the case of the assessee was selected for scrutiny. The ld. AO examined the transaction and found the same to be not well explained and addition u/s 68 was made. The ld. AO had issued notices u/s 131 and 133(6) of the Act and a report was also called from the Inspector about the actual conduct of the business of the companies who contributed to the share of the assessee company.
The assessee has primarily relied the evidences in the form of bank statements of shareholder companies, copies of accounts and copies of income- tax returns of shareholder companies.
However, the tax authorities below have found them to be insufficient to establish the identity, credit worthiness and genuineness of the transaction.
We find no error in the findings of the ld. tax authorities as merely, on the basis of documents relied by the assessee, the burden cast u/s 68 of the Act cannot be construed to be discharged. There is nothing on record to show that 2
ITA No.368/Del/2021
the assessee had made efforts to discharge the onus of identifying the companies to rebut the presumption drawn by the AO on the basis of reports received on the notices issued u/s 133(6) and u/s 131(2) of the Act. The inquiry report of the Inspector was heavily relied by the ld. AO and there is nothing before us to show that the inquiry report as given by the Inspector with regard to the identity of the assessee company being suspicious was incorrect. In the light of the aforesaid, we find no reasons to interfere in the concurrent findings of the ld. tax authorities.
In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 23.01.2024.
Sd/- Sd/- (G.S. PANNU) (ANUBHAV SHARMA) VICE PRESIDENT JUDICIAL MEMBER Dated, 23.01.2024. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi