9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 1394 - AT - Income TaxAddition u/s 68 - unexplained cash credit - identity and creditworthiness and genuineness of the transactions - Held that - The entries in the bank account clearly demonstrates the factum of realisation of investment in Prabhudan Securities Pvt.Ltd by Kali Saran Properties (P)Ltd and such proceeds being utilised to make investments in share application money of the assessee company. The reasons assigned by the and CIT(A) for making addition u/s 68 are identical as were given while treating the investments by Jai Kali Properties (P)Ltd as unexplained. It is clear from the evidence on record that the assessee has established the identity and creditworthiness and genuineness of the transactions of the receipt of share application money from M/S.Kalisaran Properties (P) Ltd. We, therefore, hold that the addition made by the AO and sustained by CIT(A)should be deleted. A copy of the source of funds of Jai Kali Properties (P)Ltd and Kalisaran Properties (P)Ltd for making investment in share application of the assessee is given as annexure to this order. In the light of the evidence on record we are satisfied that the action of the revenue authorities while making the impugned addition u/s 68 of the Act cannot be sustained. Accordingly the said addition is directed to be deleted. - decided in favour of assessee.
Issues:
Appeal against confirmation of addition of share application money under section 68 of the Income Tax Act, 1961 for A.Y. 2005-06. Analysis: The appellant, a company engaged in finance investment and project work, appealed against the addition of share application money of Rs. 15.00 lacs under section 68 of the Income Tax Act, 1961. The Assessing Officer (AO) noted the receipt of Rs. 20,00,000 from three parties, and disputed the explanation for the share application money received from two parties. The AO's decision was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)], leading to the appeal before the Tribunal. Regarding the share application money from Jay Kali Properties (P) Ltd., the appellant submitted the balance sheet of the company to prove the genuineness of the transaction. The AO questioned the investment figures in the balance sheet and the lack of evidence for the sale of investments. Despite producing the bank account details, the AO concluded the investment was unexplained. However, the Tribunal found that the appellant adequately explained the source of funds and the transaction's genuineness, leading to the deletion of the addition. Similarly, concerning the share application money from Kalisaran Properties (P) Ltd., the Tribunal found the facts analogous to the previous case. The investments in Prabhudhan Securities (P) Ltd. were liquidated to fund the share application money with the appellant. The bank statement and letter from Kalisaran Properties (P) Ltd. supported the transaction's authenticity. The Tribunal held that the appellant established the identity, creditworthiness, and genuineness of the transaction, warranting the deletion of the addition. In both cases, the Tribunal emphasized the evidence on record, including the source of funds for the investments. The Tribunal concluded that the revenue authorities' decision to add the amounts under section 68 of the Act was not sustainable based on the provided evidence. Consequently, the Tribunal allowed the appeal, directing the deletion of the additions.
|
