Assessee Discharged Burden u/s 68 and Furnished Written Submission to AO: ITAT deletes Addition [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the assessee had discharged its burden as per Section 68 of the Act, by filing confirmation, affidavit, copy of the income tax return and bank statement of the parties.

The assessee filed return of the Assessment Year 2011-12 declaring an income of Rs. 34,40,837/- and the same was processed under section 143(1) of the Act. Subsequently, an assessment order came to be passed under section 143(3) of the Act on 31/03/2014 by making an addition of Rs. 1,71,00,000/- on account of share application money/share capital, Rs. 6,95,086/- disallowance on account of provision of excise duty, disallowance on the set off of brought forward losses of Rs. 34,40,838/- and also made addition on account of service tax payable of Rs. 15,06,665/-.

As against the assessment order dated 31/03/2014, the assessee preferred an Appeal before the CIT(A). The . CIT(A) partly allowed the Appeal, wherein sustained the addition/disallowance of Rs. 6,95,086/- being the provision of excise duty on finished goods and further deleted the addition of Rs. 1,71,00,000/- made by the A.O. on account of treating share application money from undisclosed sources under section 68 of the Act. Aggrieved by the above deletion of Rs. 1,71,00,000/- by the CIT(A), the Department of Revenue preferred the present Appeal.

After hearing both the parties, the tribunal noted that the assessee had discharged its burden as per Section 68 of the Income Tax Act, by filing confirmation, affidavit, copy of the income tax return and bank statement of the parties.

The two member bench consisting of Dr. B.R.R Kumar (Accountant member) and Yogesh Kumar U.S (Judicial member) held that considering the fact that the parties have furnished written reply to the A.O. confirming the investments made by them, in the absence of any material on record to controvert the evidence and explanation furnished by the assessee and also considering the facts and judicial decisions on the subject, there is no error in the order of the CIT(A) in deleting the addition made by the A.O. accordingly the appeal was dismissed.

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