| The Tax Publishers2020 TaxPub(DT) 3411 (Del-Trib) INCOME TAX ACT, 1961
Section 68
When investors were not found at addresses furnished by assessee, it was incumbent upon assessee to produce them before AO but it was not done. Even assessee volunteered to produce Directors of investor companies before AO, but did not propose any such move before CIT(A). Accordingly, it could be said that assessee had routed its own money in the books of account through conduit of investor companies and, therefore, addition made by AO under section 68 was justified.
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Income from undisclosed sources - Addition under section 68 - Receipt of share application money along with huge premium - Assessee failed to produce investors before AO
Assessee-company claimed to have received share application money. As AO took the view that issuance of shares of Rs. 10 at a premium of Rs. 475 must be on justifiable grounds, which according to him were conspicuously absent. He recorded the fact that since assessee company had not started any business from the date of its inception and did not have any assets of considerable net worth, genuineness of transaction had to be tested from the point of view of investor company, and, therefore, he thought it necessary to secure presence of directors of the investor company for verification. Accordingly, treated the amount involved as unexplained credit under section 68. Held: When investors were not found at addresses furnished by assessee, it was incumbent upon assessee to produce them before AO but it was not done. Even assessee volunteered to produce Directors of investor companies before AO, but did not propose any such move before CIT(A). Accordingly, it could be said that assessee had routed its own money in the books of account through conduit of investor companies and, therefore, addition made by AO under section 68 was justified.
Relied:Pr.CIT v. NRA Iron and Steel (P) Ltd (2019) for 12 ITR 161 (SC) : 2019 TaxPub(DT) 1628 (SC), Pr.CIT v. NDR Promoters Pvt. Ltd. (2019) 410 ITR 379 (Del) : 2019 TaxPub(DT) 886 (Del-HC), CIT v. N.R. Portfolio Private Limited (2014) 42 Taxmann.com 339 (Del) : 2014 TaxPub(DT) 501 (Del-HC) and CIT v. Nova Promoters & Finlease (P) Ltd. (2012) 18 Taxmann.com 217 (Del) : 2012 TaxPub(DT) 1558 (Del-HC).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2010-11
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