Assessee Produced Documentary Evidence to Prove Genuineness of Share Capital: ITAT Confirms CIT(A)’s Deletion of ₹3.07 Cr Income Tax Addition [Read Order]
ITAT Dismisses Revenue’s Appeal and Upheld CIT(A)’s Deletion of ₹3.07 Cr Addition as Assessee Proved Genuineness of Share Capital with Documentary Evidence
Share Capital
Share Capital
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) recently dismissed the Revenue department’s appeal and also upheld the deletion of an income tax addition of ₹3,07,09,348 under Section 68 of the Income Tax Act, 1961. The Tribunal observed that the assessee had produced necessary documentary evidence to prove the genuineness of the share capital investment.
The assessee, Tarun International Ltd., initially filed a return of income of ₹83,43,730 and the case was taken up for scrutiny. The Assessing Officer (AO) proceeded to make an addition of ₹3,53,40,000 under Section 68 of the Income Tax Act, 1961 for the Assessment Year (A.Y.) 2011–12.
The addition made by the AO was based on the evidence available during the assessment proceedings, which established that the transactions leading to the investment in the Assessee Company were not genuine.
The assessee filed an appeal before the Commissioner of Income Tax (Appeals) ( CIT (A) ) who deleted the addition under section 68 of the Act by considering the submissions on record. The Department challenged this deletion by carrying the matter before the Tribunal.
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The bench comprising Yogesh Kumar U.S (Judicial Member) and Manis Agarwal (Accountant Member) observed that the assessee had provided sufficient documentary evidence to discharge its onus under Section 68 of the Act.
The Tribunal noted that the transactions were made through account payee cheques, and the assessee had produced copies of bank statements and audited accounts of the shareholders.
The tribunal also noted that three out of the four shareholders were companies incorporated under the Companies Act, 1956, and that all of them were income tax assessees with PAN and valid bank accounts, thus proving the identity and existence of the investors were proved.
The tribunal upheld the order of the CIT(A) and dismissed the Department’s appeal as there was no merit in the revenue’s appeal.
The assessee was represented by Amit Goel along with Pranav Yadav, while Om Prakash represented the Revenue.
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