| The Tax Publishers2019 TaxPub(DT) 1601 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Where all documentary evidences were filed before AO by assessee provising onus to creditworthiness identity and genuineness of transaction of share capital issued by assessee, addition under section 68 could not be made on mere non-production of directors of investor companies hence, issue was remanded to AO to examine directors on basis of documentary evidences filed by assessee.
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Income from undisclosed sources - Addition under section 68 - Relevant documentary evidences regarding issue of share capital filed by assessee - Non-production of directors of investor companies
During the course of scrutiny assessment, the AO noted that the assessee had issued share capital of Rs. 20 crores in the name of 7 companies. Therefore, the assessee was asked to furnish certain details about the identity and creditworthiness of the shareholders and the genuineness of the transactions. Shares were issued with high premium, i.e., assessee received shares of 20 crores of face value of 10 each share at a premium of Rs. 1550. Assessee filed before AO ITR, bank statement, audited financial statement, PAN, confirmation from investors companies allotment letter, allotment return of share capital, coppy of board resolution, etc., being documentary evidences. But, due to non-production of directors of investors companies addition was made by AO which was confirmed by the CIT(A) on the ground that burden of proof was not discharged by assessee. Held: Assessee did not get proper opportunity of producing the directors of the investors company before the AO. The AR repeatedly stated that assessee did not get proper opportunities of producing the directors before the AO and therefore, case of the AO was that non production of the directors of the investor companies have made all the evidence produced by the assessee redundant, he repeatedly offered to produce the directors of the investor companies. Assessee had submitted enough evidences to prove their identity, creditworthiness and genuineness of the transactions. Further, if assessee would produces the directors of the investor companies before the AO and they were examined by AO, it will conclusively decide the whole issue. Accordingly, on the request of both the parties, the issue in appeal was set aside back to the file of the AO with a direction to the assessee to produce the directors of the investor companies for examination before the AO. The AO was also directed to examine them on the basis of documents submitted by the assessee.
REFERRED : Sanraj Engineering (P) Ltd. ITA 69/2016
FAVOUR : Matter remanded (in assessee's favour).
A.Y. : 2014-15
INCOME TAX ACT, 1961
Section 68
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