2024 (3) TMI 1015 - HC - Income Tax

Addition u/s 68 - bogus share application/allotment money - genuineness of the share capital could not be established - ITAT deleted addition - HELD THAT - Tribunal affirmed the order passed by the CIT(A) by recording a factual finding that the three necessary ingredients, namely, identity, creditworthiness of the share applicants and genuineness of the transaction as provided u/s 68 of the Act have been established and there was no ground to interfere with the order passed by the CIT(A) - No question of law much less substantial question of law is arising for consideration in this appeal.

Summary

Issues involved:
The issues involved in this judgment are the condonation of delay in filing the appeal and the deletion of additions under Section 68 of the Income Tax Act, 1961.

Condonation of Delay:
The High Court allowed the condonation of delay petition as the appellant department provided satisfactory reasons for the 59-day delay in filing the appeal under Section 260A of the Income Tax Act.

Deletion of Additions under Section 68:
The appeal was against the order passed by the Income Tax Appellate Tribunal regarding the deletion of additions under Section 68 of the Act. The Tribunal had deleted additions despite concerns over the genuineness of share capital and creditworthiness of the applicant companies.

Assessment Findings:
The Commissioner of Income Tax (Appeals) extensively examined the factual positions of the companies involved, M/s. Honesty Dealers Private Limited and M/s. Seaview Agencies Private Limited. The CIT(A) found that the creditworthiness of M/s. Honesty Dealers Private Limited was established, and a clear link existed between the share capital raised and investment in the assessee company.

Tribunal's Decision:
The Tribunal re-evaluated the factual positions and upheld the CIT(A)'s decision regarding the share application money from M/s. Honesty Dealers Private Limited. It also found the identity and creditworthiness of the share applicant from M/s. Seaview Agencies Private Limited to be genuine.

Legal Position:
The Tribunal, after considering relevant case laws, affirmed the CIT(A)'s order by establishing the necessary ingredients of identity, creditworthiness of share applicants, and genuineness of transactions under Section 68 of the Act.

Conclusion:
The High Court found no substantial question of law for consideration in the appeal, leading to its dismissal along with the stay application.