In the case of reversal of deletion of addition on unexplained cash credit, the Delhi High Court directed the Income Tax Appellate Tribunal (ITAT) to state valid reason for the reversal.
Om Shiva Traders Pvt Ltd , the appellant challenged the ITAT order reversing the order of CIT(A) which was in favour of the assessee.The fact of the case was the Assessing Officer (AO) had added Rs. 3 crores, to the appellant/assessee’s income which was apparently received by the appellant/assessee, in the form of share capital and share premium.
According to the appellant/assessee, Rs. 2 crores was invested by an entity going by the name, Bhawani Portfolio Pvt. Limited, while Rs. 1 crore was invested by another entity going by the name, Thar Steels Pvt. Limited.
It was stated that Rs. 2.50 crores was invested towards share capital and the balance amount, i.e. Rs. 50 lakhs, was received in the form of share premium. According to the CIT(A), the appellant/assessee had satisfied the triple test, i.e., i.e., established the identity, genuineness and creditworthiness of the investors which was reversed by the Tribunal, with a direction to the AO to make a fresh enquiry.
It was viewed that the Tribunal has not provided any reason whatsoever, as to why it disagrees with the conclusion arrived at by the CIT(A).
The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the reversal of the CIT(A)’s order has taken place, without the Tribunal discussing as to what part of the order was unsustainable. Further held that the Tribunal will have to deliberate on the matter afresh and articulate in the order its reasoning, if it chooses not to agree with the order of the CIT(A).
While allowing the appeal, the Court set aside the impugned order.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
