2017 (7) TMI 734 - HC - Income Tax

Addition u/s 68 - revision u/s 263 - Held that - The assessment of Mr. Suveer Arora for the same AY was completed under Section 143(3) of the Act. After considering all of the above documents, the ITAT came to the conclusion that there was no ground to dispute the genuineness of the investment. In response to the query from the Court, Mr. Bhatia confirmed that the assessment order passed in the case of Mr. Suveer Arora under Section 143(3) of the Act was not re-opened by the Revenue by invoking Section 263 of the Act. In the circumstances, the mere fact that Mr. Suveer Arora was not produced by the Assessee before the AO for examination will not detract from the identity, genuineness and creditworthiness of the Investor. The conclusion reached by the ITAT cannot be said to be suffering from any legal infirmity. The question framed is, accordingly, answered in the negative, i.e. in favour of the Assessee and against the Revenue.

Summary

Issues:
- Delay in filing the appeal
- Interpretation of Section 68 of the Income Tax Act, 1961 regarding the sum of ?3.10 crores in issue

Delay in filing the appeal:
The High Court allowed the application to condone the delay in filing the appeal. The appeal by the Revenue under Section 260A of the Income Tax Act, 1961 was admitted against an order passed by the Income Tax Appellate Tribunal for the Assessment Year 2010-11. The Court framed a question of law related to the interpretation of Section 68 of the Act concerning the sum of ?3.10 crores in issue.

Interpretation of Section 68 of the Income Tax Act:
The case involved the identity, genuineness, and creditworthiness of an investor, Mr. Suveer Arora, who purchased shares worth ?3,10,00,000 of the Assessee company. Various documents were produced during the assessment proceedings to support the investment, including confirmation from Mr. Suveer Arora, PAN card, bank statement, allotment of shares form, passport, income tax return, and assessment order. Additionally, a letter and an affidavit related to the issue of share capital were considered by the CIT (A).

The ITAT concluded that there was no reason to dispute the genuineness of the investment after reviewing all the documents. The Revenue confirmed that the assessment order of Mr. Suveer Arora was not reopened under Section 263 of the Act. The Court held that the mere absence of Mr. Suveer Arora during the examination by the AO does not undermine the identity, genuineness, and creditworthiness of the investor. The ITAT's decision was found to be legally sound, and the question framed was answered in favor of the Assessee and against the Revenue. Consequently, the appeal was dismissed.