| The Tax Publishers2022 TaxPub(DT) 0758 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Assessee by furnishing plethora of documentary evidences proved identity, creditworthiness and genuineness of the share applicants/investors from whom assessee received the funds who were the group companies of assessee-company. Further, no incriminating material was found as a result of search to support the allegation that money invested by the investor was unaccounted money of assessee. So far as the allegation of the revenue that there was surrender made by the director of the company Sanjeev Aggarwal in his statement recorded under section 132(4), statement under section 132(4) could not be treated as incriminating material found during the course of search. Accordingly, no addition was called for.
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Income from undisclosed sources - Addition under section 68 - Receipt of share capital from group companies -
AO, pursuant to search conducted at assessee's premises, initiated proceedings under section 153A and required assessee to substantiate receipt share capital/share application money by filing requisite details. Assessee filed various documentary evidences but AO rejecting the various explanations given by assessee, made addition of the same on the ground that assessee failed to establish identity, creditworthiness and genuineness of the share applicants/investors from whom assessee received the funds who were the group companies of assessee-company. Also, AO alleged that there was surrender made by the director of the company Sanjeev Aggarwal in his statement recorded under section 132(4). Held: Assessee by furnishing relevant extracts, statement of bank account statement of the investors showing payments made towards share application money, Copies of allotment letters, Share Application Form duly filled by the investor companies, Confirmation in respect of allotment of equity shares to the investors, PAN card of the Investor companies, Memorandum and Articles of Association of the investors companies clearly depicting their corporate identity number, share certificate issued by assessee company, A chart showing details of director of investor companies, A chart showing details of shareholders of the investor companies and acknowledgement of the income tax return filed for assessment year 2015-16 by the investor companies along with their audited financials for the year ended 31-3-2015, proved identity and creditworthiness of investors and genuineness of transactions. Further, it is an admitted fact that investors were group companies and no incriminating material was found as a result of search to support the allegation that money invested by the investor was unaccounted money of assessee. So far as the allegation of the revenue that there was surrender made by the director of the company Sanjeev Aggarwal in his statement recorded under section 132(4). Statement under section 132(4) could not be treated as incriminating material found during the course of search. Accordingly no addition was called for.
Relied:CIT v. Nipun Auto (P) Ltd., (2013) 361 ITR 155 (Del) : 2013 TaxPub(DT) 1936 (Del-HC), CIT v. Goodview Trading Pvt. Ltd., vide ITA No.377/2016, Order, dated 21-11-2016 : 2017 TaxPub(DT) 219 (Del-HC), CIT v. Vrindavan Farms (P) Ltd., in ITA No.71/2015, Order dated 12-8-2015 : 2015 TaxPub(DT) 4373 (Del-HC), Taneja Developers & Infrastructure (P) Ltd., vide ITA No. 108/2100, Order dated 18-2-2020 : 2020 TaxPub(DT) 1465 (Del-HC), ITO v. Angel Cement (P) Ltd. vide ITA No.4691/Del/2016, Order, dated 18-3-2021 : 2021 TaxPub(DT) 1895 (Del-Trib), CIT v. Victor Electrodes Ltd., reported in (2010) 329 ITR 271 (Del) : 2010 TaxPub(DT) 1927 (Del-HC) and Moon Beverages and Hindustan Aqua Ltd., vide ITA Nos.7374/Del/2017 and 7567/Del/2017 for assessment year 2013-14, Order dated 7-6-2018 : 2018 TaxPub(DT) 3657 (Del-Trib).
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