INCOME TAX OFFICER-11(3)(4), MUMBAI vs. WINSTAR E-COM PRIVATE LIMITED, MUMBAI

, statement of facts, assessee’s submissions and dealt on AY 2011-12 & 2012-13 M/s Winstar E-Com Pvt.Ltd.Mumbai the material information filed and has directed the assessing officer to delete the addition u/sec68 of the Act and partly allowed the assessee appeal. Aggrieved by the CIT(A)order, the revenue has filed the appeal before the Hon’ble Tribunal. At the time of hearing, the Ld. DR submitted that the CIT(A) 5. has erred in deleting the addition of share capital and premium irrespective of the facts that the assessee has failed to establish the genuineness and creditworthiness of the transactions and supported the order of the Assessing Officer. None appeared on behalf of the assessee.

6. We have heard Ld.DR submissions and perused the material on record. The sole crux of the disputed issue envisaged by the Ld. DR that the CIT(A) has erred in deleting the share capital and share premium ignoring the fact that the assessee has not establish the genuineness and credit worthiness of the transactions. The AO has relied on the financial statements of F.Y 2006-07 and accepted that the assessee has received the share application money pending allotment of Rs. 2,00,00,000/- which includes Rs.1,96,00,000/- towards the share premium and Rs.4,00,000/- towards the share capital. Whereas the shares were allotted in F.Y. 2011-12 were the amounts are transferred to share premium account and the share capital account. The Revenue contentions are that the assessee has not proved the genuiness and creditworthiness of the parties. We find the CIT(A) has dealt on the provisions of section 68 of the Act and the submissions of the AY 2011-12 & 2012-13 M/s Winstar E-Com Pvt.Ltd.Mumbai assessee on the disputed issues and observed that the share application money was received in F.Y. 2006-07 by the assessee and further, there is no sum credited/ received in the books of account of the assessee during the F.Y. 2011-12 and hence addition is not sustainable and granted relief to the assessee observing at page 9 of the order read as under:- “Ground No. 2: Under this ground of appeal the appellant has disputed addition of Rs. 2crores made by the AO u/s 68 in respect of 10 shareholders mentioned in para 2 of the assessment order. I have carefully considered the rival submissions and find that vide letter dtd. 17.03.2015 the appellant vehemently argued that, "As regards your show cause to make the addition of Rs. 2,00,00,000/- as unexplained cash credit as the notice sent to parties returned unserved. In this regards we have to mention that there is no unexplained cash credit in the books of your assessee in the FY 2011-12, your assessee had allotted the shares in the F.Y. 2011-12 against the share application money received in earlier years. We are enclosing herewith the bank statement of your assessee for the period when the share applications were received and we have already submitted the financial statements of earlier years reflecting the share application money. As your assessee had not received any money during the F.Y. 2011-12 towards the share capital issued during the F.Y. 2011-12, hence by no stretch of imagination there can be any addition for unexplained cash credit during the F.Y. 2011-12." I have considered the show cause notice as well as the contention of the appellant and find that Sec. 68 refers to sums found credited in the books during the year. Accordingly, the contention of the appellant this sum could not be brought to tax in FY 2011-12 because the sum was received in AY 2007-08 Accordingly, the addition made by the AY 2011-12 & 2012-13 M/s Winstar E-Com Pvt.Ltd.Mumbai AO in AY 2012-13 is uncalled for and therefore direct the AO to delete the same. This ground of appeal succeeds”.