Ancon Chemplast (P). Ltd. v. ITO

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The Tax Publishers2021 TaxPub(DT) 2451 (Del-Trib) : (2021) 189 ITD 0156 : (2022) 093 ITR (Trib) 0167

INCOME TAX ACT, 1961

Section 68

Assessee filed pethora of evidences to prove genuineness of share capital / premium received by it. Therefore amount so received could not be treated as unexplained credit under section 68 as merely based on director's statement recorded during search in case of investor-company the impugned statements were recorded by AO at the back of the assessee which had not been supplied to assessee for filing objections or to seek for cross-examination of their statements.

Income from undisclosed sources - Addition under section 68 - Receipt of share capital/premium -

Assessee-company received share capital/premium. AO based on director's statement recorded during search in case of investor-company treated amount received by assessee as unexplained credit under section 68. Held: Assessee filed copy of ITR of Investor Company along with its audited balance-sheet and Director's Report, Certificate of Incorporation and proof of trading of shares at BSE. Copy of confirmation of ITR, copy of Board Resolution, share application along with share application form. Master Data, Certificate of Incorporation and evidence in respect of listing of shares at BSE. The documents remained unrebutted by AO. Since impugned statements were recorded by AO at the back of the assessee and had not been supplied to assessee for filing objections or to seek for cross-examination of their statements, therefore, such statements could not be read in evidences against assessee, therefore, addition made by AO could not be sustained.

Relied:Kishanchand Chellaram (1980) 125 ITR 713 (SC) : 1980 TaxPub(DT) 1130 (SC) and Andaman Timber Industries (2015) 281 CTR 214 (SC) : 2015 TaxPub(DT) 5186 (SC) and INS Finance & Investment (P) Ltd., New Delhi v. ITO, Ward-12(3), New Delhi in ITA No. 9266/Del./2019 for the assessment year 2010-11 vide Order, dated 26-10-2020.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11

IN THE ITAT, DELHI BENCH