ELEGANT DEALMARK PVT. LTD.,KOLKATA vs. ITO, WARD-5(3), KOLKATA

ITA 51/KOL/2024Status: DisposedITAT Kolkata21 August 2024AY 2012-13Bench: SRI RAJPAL YADAV, VICE-PRESIDENT & SRI SANJAY AWASTHI (Accountant Member)15 pages
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What did the Tribunal hold?

The Tribunal held that the addition for share application money under Section 68 was not justified as the assessee had provided sufficient documentation. However, the disallowance under Section 14A was deleted as no exempt income was earned by the assessee during the relevant year.

What were the facts?

The assessee company received share application money of Rs. 1,57,50,000/-. The Assessing Officer treated this as unexplained cash credit as the identity, creditworthiness, and genuineness of the shareholders could not be verified. An addition of Rs. 9,647/- was also made under Section 14A.

What were the issues?

Whether share application money can be treated as unexplained cash credit when the assessee provides documentation, and whether disallowance under Section 14A is permissible without earning exempt income.

Which sections of the Income-tax Act were involved?

Section 68,Section 14A

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Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA

Before: SRI RAJPAL YADAV, VICE- & SRI SANJAY AWASTHI

Per Sanjay Awasthi, Accountant Member:

In this case, the appellant company was incorporated in the FY 2011- 12 and filed its return of income on 23.12.2012 showing a total income of Rs. 289/-. The Assessing Officer (hereinafter referred to as ld. 'AO') focused on proving the genuineness of the share application money of Rs. 1,57,50,000/- , comprising of Rs. 17,825 shares of face value of Rs. 10/-, with a premium of Rs. 990/- each. Ld. AO also recorded the following

The order continues below.

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