2009 (8) TMI 1204 - AT - Income Tax

Summary

Issues: Appeal against deletion of addition of share application money and commission by CIT (Appeals) u/s 68 of Income Tax Act, 1961 for assessment year 2001-02.

Share Application Money Addition:
The Assessing Officer added Rs. 10 lacs as unexplained share application money based on a typographical error in the balance sheet. The CIT (Appeals) noted that the actual share application money received was Rs. 5 lacs, supported by evidence like PAN, ROC details, and IT return. The CIT (Appeals) referenced legal precedents to establish the genuineness of the transaction. The Assessing Officer's lack of investigation and reliance on external information led to the deletion of the addition.

Commission Addition:
The addition of Rs. 20,000 on account of commission paid for obtaining the unexplained cash credit was also deleted by the CIT (Appeals) due to the deletion of the principal amount. Since the principal amount was deleted, the question of assessability of commission paid did not arise.

Judicial Analysis:
The ITAT Delhi upheld the CIT (Appeals) decision, citing that the necessary particulars were provided by the assessee to prove the identity of the share applicants. The ITAT emphasized that the Assessing Officer's requirement for more than PAN, assessment particulars, and confirmations was contrary to legal precedents. The ITAT confirmed the deletion of the addition based on the typographical error and the correct share application money being Rs. 5 lacs. The ITAT dismissed the revenue's appeal, affirming the CIT (Appeals) order.

Conclusion:
The ITAT Delhi dismissed the revenue's appeal against the deletion of the share application money and commission additions, emphasizing the importance of providing necessary evidence to establish transactions and highlighting the significance of legal precedents in such matters.