2019 (11) TMI 590 - HC - Income Tax

Addition u/s 68 - unexplained cash credit - HELD THAT - As far as the amount of ₹ 5,18,44,700/- is concerned, both the Commissioner (Appeals) and the Tribunal have, after considering the records, categorically held that this amount was relevant for the Assessment Year 2006-07. In fact the Assessing Officer in his remand report dated 16 September 2010 has accepted this position. As regard the amount of ₹ 2.94 crores is concerned, the Tribunal has sent the same for verification by the Assessing Officer. The contentions of the parties regarding this amount about its genuineness, etc. would be considered on remand.

Summary

Issues:
1. Addition of share application money under section 68 of the Income Tax Act, 1961.
2. Treatment of share application money in the assessment year.

Analysis:
1. The Appellant Revenue challenged the order of the Income Tax Appellate Tribunal regarding the addition of share application money under section 68 of the Income Tax Act, 1961. The Assessing Officer treated the amount received as share application money as unexplained cash credit and added it as income from other sources due to the failure of the Assessee to prove the genuineness of the transaction and creditworthiness of the shareholder. The Commissioner of Income Tax (Appeals) directed the Assessing Officer to take necessary action for the amount received in the previous assessment year and deleted the addition for the remaining amount after finding sufficient evidence of genuineness. The Tribunal confirmed that the amount not pertaining to the relevant assessment year should be excluded and remanded the matter for further examination of the remaining amount.

2. The Tribunal's decision to exclude the amount not relevant to the assessment year was upheld by the High Court. The Court noted that the Assessing Officer had accepted this position in the remand report. Regarding the remaining amount, the Court agreed with the Tribunal's decision to send it for verification by the Assessing Officer to determine its genuineness. The Court concluded that the questions raised did not give rise to any substantial question of law, leading to the dismissal of the Appeal.

In conclusion, the High Court dismissed the Appeal, upholding the decisions of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal regarding the treatment of share application money under section 68 of the Income Tax Act, 1961. The Court affirmed the exclusion of the amount not relevant to the assessment year and the remand for further verification of the remaining amount to establish its genuineness.