Full News
ITAT confimed deletion as assessee had provided details of share applicants
ITAT confimed deletion as assessee had provided details of share applicants
" Assessee, a Non-Banking Finance company, declared an income of Rs 24,68,110. AO received information that assessee had received accomodation entries on share application money shown by it from various companies. AO determined total income at Rs 65,88,106. CIT(A) deleted the addition. ITAT confimed deletion as assessee had provided necessary details including ward/circle where share applicants were assessed to tax and discharged onus cast on it."-501175
1. The Assessee filed return of income on 1.3.2004 declaring a total of Rs. 24,68,110/-. The assessee is a company and also Non-Banking Finance Co. (NBFC) registered with RBI. During the year, the assessee company had shown receipt of share application money / share capital of Rs. 1,15,00,000/- from various companies. The AO received information from the Investigation Wing of the Department, that the companies / persons which contributed towards share application money / share capital were involved in providing accommodation entries. In view of the specific information, the AO initiated action u/s. 148 (of Income Tax Act, 1961) and completed the assessment on 30.12.2010 determining the total income at Rs. 65,88,106/- disbelieving a part of share application money / share capital of Rs. 40,00,000/-.
2. The First Appellate Authority deleted the addition.
3. On appeal, the ITAT held as under:
"It is very much pertinent to mention here that in the appellant's case scrutiny assessment u/s 143(3) (of Income Tax Act, 1961) was made on 28.02.2006. In the course of the said proceedings, the details of share application money / share capital were furnished vide its explanation dated 16.11.2005 which are available at pages 40 to 43 of the paper book furnished. Nothing adverse was found. The AO has not verified the details furnished by the assessee and I.T. records of the shareholders/investing companies. These facts were not controverted by the AO. The assessee has discharged its burden of providing basic details which were required for verification to fulfill the conditions viz. identity of the creditor, credit worthiness of the creditor and genuineness of transaction as laid down by higher judicial authorities for examining the issue is u/s. 68 (of Income Tax Act, 1961).
4. I have no hesitation to conclude that the assessee has provided necessary details including the ward/circle where the share applicants/ investing companies were assessed to income tax and discharged the onus cast on it. All the amounts were received, through Banking channels by way of cheques issued in favour of the Appellant Company towards share application money. It is further seen that shares were allotted as per the documents furnished before ROC.
5. The assessee cannot be penalized for the mistakes/faults committed by the share holders. The AO has not found any discrepancy in the books of account and bank accounts maintained by the assessee.
6. After going through the aforesaid detailed finding given by the Ld. CIT(A) and the precedents relied upon by him in his impugned order on the additions in dispute, we are of the considered view that no interference is called for in the well reasoned order passed by the Ld. CIT(A) on the deletion of additions in dispute, hence, we uphold the same and dismiss the ground no. 1 raised by the Revenue in its Appeal.
7. In the result, the Revenue's Appeal stands dismissed.”
Case Reference - Assistant Commissioner of Income Tax vs. M/s VIP Gorwth Fund Pvt. Ltd.
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'H', NEW DELHI
BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND
SHRI L.P. SAHU, ACCOUNTANT MEMBER
ITA No. 5153/Del/2011
Assessment Year: 2003-04
×
