ACIT, NEW DELHI vs. M/S. DHOOT DEVELOPERS PVT. LTD., GURGAON

The above captioned two separate appeals by the Revenue and cross objections by the assessee are preferred against two separate orders of the ld. CIT(A) – 3, New Delhi dated 19.12.2011 & 20.12.2011 pertaining to Assessment Years 2007-08 & 2008-09 respectively.

Since underlying facts in the issues are identical in the captioned appeals, they were heard together and are disposed of by this common order for the sake of convenience and brevity.

Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules.

Briefly stated, the facts of the case are that search and seizure operation was carried out at the premises of the assessee on 25.09.2008 and accordingly, statutory notices were issued and served upon the assessee, in response to which, the assessee filed its return of income.

During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has received share premium of Rs. 8.10 crores from the following parties :

To verify the genuineness of the aforementioned credits, the Assessing Officer issued a questionnaire asking the assessee to furnish the following:

The assessee filed a detailed reply alongwith the required documents. The Assessing Officer further made enquiry by issuing notice u/s 133(6) of the Act to the aforementioned companies but received reply from five companies and accepted the transaction with these five companies but in respect of other companies, the Assessing Officer was of the opinion that these companies do not have sufficient funds for making the impugned investment in the share purchase of the assessee and proceeded to complete assessment by making an addition of Rs. 5.75 crores u/s 68 of the Act in respect of share premium.

The assessee carried the matter before the ld. CIT(A) and vehemently contended that the assessee has successfully discharged the onus cast upon it by provisions of section 68 of the Act by establishing the identity, genuineness of the transaction and capacity of the investors.

After considering the facts and submissions and after examining the documentary evidences, the ld. CIT(A) was convinced with the claim of the assessee and directed the Assessing Officer to delete the impugned addition.

We have given thoughtful consideration to the orders of the authorities below. We have also carefully verified the evidences brought on record in respect of credit entry. We find that the assessee has furnished declaration, allotment letter, bank statements and financial statements of the share applicants.

We find that each and every share applicant has confirmed the transaction by submitting reply to the information called for u/s 133(6) of the Act to the Deputy Commissioner of Income Tax, Central Circle–1.

All that the Assessing Officer can examine for the impugned A.Y is credit in light of provisions of section 68 of the Act, for which the assessee is required to prove the identity, genuineness of the transaction and capacity. Evidences on record show that the identity has been established beyond doubt, share application transactions are through banking channel, entries duly reflected in the bank statement thereby justifying the genuineness of the transaction.

In so far as capacity is concerned, the following chart speaks for itself:

Considering the demonstrative evidences, we are of the Considering the demonstrative evidences, we are of the Considering the demonstrative evidences, we are of the considered view that the assessee has considered view that the assessee has successfully discharged the onus successfully discharged the onus cast upon it by provisions of section 68 of the Act. Therefore, we cast upon it by provisions of section 68 of the Act. Therefore, we cast upon it by provisions of section 68 of the Act. Therefore, we decline to interfere with the findings of the ld. CIT(A). decline to interfere with the findings of the ld. CIT(A).

Appeals of the Revenue are accordingly dismissed. Appeals of the Revenue are accordingly dismissed.

Since the cross objections are not pressed, the same are also dismissed.

Before parting, the chart explaining the credit worthiness in is as under:

In the result, the appeals of the Revenue in & 932/DEL/2012 as well as the cross objections of the assessee in CO Nos. 150 & 151/DEL/2019 are dismissed.