The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition under Section 68 of Income Tax Act, 1961 after the taxpayer provided adequate and credible evidence on their identity, creditworthiness, and the genuineness of the share subscription transactions.
The assessee CDS Infra Projects Limited was a private limited company, engaged in the business of construction/development of roads, highways, bridges etc. all across India. The return of income for A.Y. 2018-19 was filed by the assessee company on 30.10.2018, declaring total income of Rs. 12,54,66,780/-.
During the course of assessment proceedings, the AO observed that construction works are awarded to the assessee company by National Highways Authority of India ( NHAI ) under the Ministry of Road Transport & Highways, State PWD etc. in various states. The assessee has following sister concerns/ joint ventures.
The AO sought to examine the veracity of the mobilization advance received by the joint venture companies, which, in turn, was used to pay monies to the investors of the assessee company. The assessee even gave explanation of the mobilization advance received by the joint venture companies from NHAI after due deduction of tax thereon. The assessee submitted that it had furnished details of even the source of source in the instant case, apart from furnishing the entire details with documentary evidence of the investors thereby proving the three ingredients of Section 68 of the Income Tax Act.
The two member bench of the tribunal comprising Sakti Jit Dey (Vice President) and M. Balaganesh (Accountant member) held that the appellant has duly discharged its onus under Section 68 to establish the identity of the creditor, creditworthiness of the source of fund and source of source of fund and also genuineness of the transaction in respect of share subscription money received by it. Therefore, the addition made under Section 68 was not sustainable. Hence, the same deserves to be deleted.
ITAT did not find any infirmity in the said finding of the CIT(A). Accordingly, grounds raised by the revenue were dismissed.
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