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2020 (4) TMI 328 - AT - Income TaxAddition u/s 68 - unexplained cash credit - assessee has failed to discharge the burden to substantiate the creditworthiness of the share investors and genuineness of the transactions - AO issued the notice u/s 133(6) of the Act to all the 12 parties which were not served - CIT-A deleted the addition - HELD THAT - At the time of hearing before the CIT(A), the assessee furnished the PAN Card of the share applicants, income tax acknowledgment for the A.Y. 2012-13, annual accounts of share applicant for A.Y. 2012-13, bank statements for AY 2012-13 depicting the payments made by the share applicants through banking channel, ROC records of the share applicant for AY2012-13 Memorandum of Association and Articles AO submitted the remand report dated 07.11.2017 basically the COT(A) relied upon the remand report and same more additional evidence, the CIT(A) analyses the record of each investor which has been mentioned in the order. There is no need to repeat the same because relevant record from each and every investor has been mentioned by CIT(A) in his order. No doubt, deficiency if any is liable to be looked into even at the time of remand proceeding also. Each and every share-holder responded to the notice u/s 133(6) of the Act and submitted necessary details. The facts are not distinguishable at this stage. After the examination of each and every details by the CIT(A), the CIT(A) was of the view that the assessee has proved the identity, genuineness and creditworthiness of the share-holder. Which facts have wrongly considered by the CIT(A) is not apparent on record. Therefore we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. - Decided against revenue.
Issues Involved:
1. Deletion of addition of ?3,75,00,000/- made under Section 68 of the Income Tax Act. 2. Evaluation of the creditworthiness of share investors and genuineness of transactions. 3. Reliance on the remand report by the CIT(A) and its implications. Issue-wise Detailed Analysis: 1. Deletion of Addition under Section 68 of the Income Tax Act: The primary issue in the appeal was whether the Commissioner of Income Tax (Appeals) [CIT(A)] erred in deleting the addition of ?3,75,00,000/- made under Section 68 of the Income Tax Act. The Assessing Officer (AO) had added this amount to the assessee's income, questioning the genuineness of the transactions and the creditworthiness of the share investors. The CIT(A), however, allowed the assessee's claim, leading to the Revenue's appeal. 2. Evaluation of Creditworthiness and Genuineness of Transactions: The AO had issued notices under Section 133(6) of the Act to verify the claim from 12 parties who had invested in the assessee's company. The AO found the responses unsatisfactory and added ?3,75,00,000/- to the assessee's income under Section 68. The CIT(A) examined the details provided by the assessee, including PAN numbers, bank statements, annual accounts, and ROC records of the investors. The CIT(A) concluded that the assessee had demonstrated the identity, genuineness, and creditworthiness of the investors. The CIT(A) referenced multiple judicial precedents, including CIT vs. Divine Leasing & Finance Ltd., Hindustan Inks & Resins Ltd. vs. Dy. C.I.T., and CIT vs. Gangadeep Infrastructure Pvt. Ltd., to support the decision. 3. Reliance on the Remand Report: The CIT(A) called for a remand report from the AO, who submitted it on 07.11.2017. The CIT(A) relied on this report and additional evidence provided during the appellate proceedings. The CIT(A) thoroughly analyzed the records of each investor, including their financial statements and bank transactions, and found no discrepancies. The CIT(A) concluded that the assessee had satisfactorily proved the identity, genuineness, and creditworthiness of the share applicants. The Tribunal observed that the CIT(A) had judiciously and correctly decided the matter, noting that the AO's findings were not substantiated by any contrary evidence. Conclusion: The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal. The Tribunal found that the CIT(A) had adequately addressed the issues of identity, genuineness, and creditworthiness of the share investors and had rightly relied on the remand report and additional evidence. The Tribunal concluded that the CIT(A) had decided the matter judiciously and correctly, and there was no need for interference at the appellate stage. The appeal filed by the Revenue was dismissed, and the order was pronounced in the open court on 29/01/2020.
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