ITAT deletes Addition as Assessee Discharged Initial Onus to Prove Identity of Investor Companies, Creditworthiness, Genuineness of Transaction [Read Order]

ITAT - Addition - Investor Companies - Creditworthiness - Genuineness of Transaction - Taxscan

The Income Tax Appellate Tribunal (ITAT), Delhi Bench deleted the  addition as assessee discharged initial onus to prove identity of Investor Companies, creditworthiness, genuineness of transaction.

The assessee company, Shyam Sunder Infrastructure (P) Ltd. has received share application money from different applicants of Rs.98 lakhs.

The assessee was asked to produce the Principal Officers of the share applicants, however, assessee failed to produce the same. The AO, therefore, made an addition of Rs.98 lakhs under section 68 of the Income Tax Act, 1961. The AO also made an addition of Rs.1,96,000/- on account of commission paid by assessee at the rate of 2%. The AO completed the assessment under section 144 or 147 of the Income Tax Act, 1961.

The assessee has urged that AO made addition of Rs.98 lakhs only in the reassessment order, but, made wrong facts in the reasons by noting that entry was taken of Rs.1,47,00,000/-. He has, therefore, submitted that AO recorded wrong and incorrect facts in the reasons for reopening of the assessment. The A.O. was having no reason to believe that income chargeable to tax has escaped assessment and merely relied upon the report of the Investigation Wing. No name of entry provider has been mentioned in the reasons. The assessee also filed objections to the reopening of the assessment which have not been considered in proper perspective, copy of which is filed in the PB. The AO has not applied his mind to the information so received from the Investigation Wing, therefore, reopening of the assessment is illegal and bad in Law and liable to be quashed.

The coram of B.K. Billaiya and Bhavnesh Saini noted that the assessee produced sufficient documentary evidence before AO to prove ingredients of Section 68. The Investors have directly confirmed making investment in the assessee company in reply to the notice under section 133(6) at the appellate stage.

The Tribunal while deleting the additions further observed that the assessee has discharged its initial onus to prove the identity of the Investor Companies, their creditworthiness and genuineness of the transaction. No evidence has been brought on record by the AO if assessee paid any commission to any person of Rs.1,96,000/-. Therefore, there is no justification to make both the additions against the assessee.

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Shri Shyam Sunder Infrastructure (P) Ltd vs Income Tax Officer

Counsel for Appellant:   Shri Vinod Kumar Bindal

Counsel for Respondent:   Shri Prakash Dubey


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