Assessee discharged it onus to prove all Shareholders were Corporate entities, duly assessed to Tax but Income Tax Dept. failed to Rebut: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Delhi Bench has held that the assessee discharged its onus to prove all shareholders were corporate entities, duly assessed to tax but Income Tax Department failed to Rebut.

The assessee, M/s. Mapsa Tapes Pvt. Ltd. contended that no search was conducted u/s 132 of the Act, a notice u/s 153A of the Act dated 28.08.2015 was served on the assessee. The aforesaid notice issued u/s 153A of the Act was objected by the assessee vide its objections dated 26.10.2015 wherein it was contended that since no search was conducted in the case of the assessee as such, notice issued u/s 153A of the Act was without jurisdiction and hence the proceedings initiated vide notice dated 08.09.2015 issued u/s 153A of the Act should be dropped.

The AO did not discharge onus cast upon him under law by bringing any evidence or material to rebut the evidences furnished by the assessee.

The coram of B.R.R.Kumar and Amit Shukla has held that even on merits the assessee had discharged onus cast upon him under the law by furnishing evidence to the effect that all the shareholders in the assessee company were corporate entities, duly assessed to tax and, had subscribed to share-capital by account payee cheques and supported by necessary evidence including their permanent account numbers, confirmations, addresses, etc. All shareholders were not only identifiable companies but also had requisite credit worthiness. 

“It is also worth noting that notices sent by the AO to all these shareholders u/s 133(6) of the Act were duly served, which proved the existence of these shareholders. This shows that assessee has prima facie discharged its burden and onus was on the AO/revenue to rebut the evidences furnished by the assessee which the revenue has failed to do, as such, even on merits addition made by the AO cannot be sustained,” the ITAT added.

To Read the full text of the Order CLICK HERE

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