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$-45 HIGH COURT OF DELHI
ITA 883/2016
PR.COMMISSIONER OFINCOME TAX-4 Appellant , Through : Sh. Zoheb Hossain, Sr. Standing
Counsel with Sh. Akshay Saxena and Sh. Deepak
Anand,Advocates.
ITA 883/2016
PR.COMMISSIONER OFINCOME TAX-4 Appellant , Through : Sh. Zoheb Hossain, Sr. Standing
Counsel with Sh. Akshay Saxena and Sh. Deepak
Anand,Advocates.
VERSUS
' GAZIPURPROPERTIESPVT!LTD. ...„ Respondent
Through:None.
Through:None.
CORAM:
HON'BLE MR.JUSTICE S.RAVINDRA BHAT
HON'BLE MR.JUSTICE NAJMIWAZIRI
07.12.2016 In the appeal under Section 260A ofthe Income Tax Act, 1961
[hereafter "the Act"], the revenue is aggrieved by the order of the
Income Tax Appellate Tribunal(ITAT)which confirmed the decision ofthe CIT(Appeals)on the question ofaddition under Section 68 of the Act. ;
During the relevant period, i.e. AY 2006-07, the assessee had inter «//« claimed in its returns that it received large sums of money from third parties on account ofcapital issue. The Assessing Officer
(AO)doubted the genuineness ofthe source offunds,added these and broughtthem to tax.In the appellate proceedirigs,CIT(A),based upon additional materials, furnished during the course ofthe proceedings, sought a remand report.In the remand proceedings,the AO called the share applicants and also sought details and particulars. The share
2016:DHC:8402-DB applicants complied to the communication, and provided details,of
PAN numbers, filed copies of the income tax returns along with balance sheets, profit and loss accounts, bank statements and other relevant materials. The remand report concluded that the share applicants, after furnishing these particulars did not choose to appear further. These materials were categorically considered by the CIT(A) who noted thatthe identity ofthe share applicants and ofthe financial particulars, PAN numbers. It returns, names of banks, the channel through which the funds were spentin respect ofthe share applicants, profit and loss accounts, balance sheets, bank statements of four applicants during the relevant period showing the relevant transactions etc. had been disclosed. The CIT(A),therefore, held that the assessee had discharged the burden of proving three-pronged requirements under Section 68 of the Act, i.e. identity of the share applicants, genuineness ofthe transaction and creditworthiness ofthe investor. So concluding, the CIT(A)allowed the appeal. This order was confirmed by the ITAT.
It is urged on behalf ofthe revenue that the CIT(A)ignored, and overlooked the incriminating statements made by the accommodation entry providers, who had clearly stated that the sums of money reached through bogus entries and that in reality, the amounts had to be added under Section 68. It was submitted that absence of the share applicants after a point of time led to- the inference thatthere was no genuineness asto the transaction.
This Court is ofthe opinion the the requirements ofSection 68 as spelt out in CIT v. Lovely Exports Pvt. Ltd. 2008(299)ITR 268
(SC) have been complied with. The assessee did all, that it was/ required to do - provide the identity ofthe shareholders,the financials relating to. transactions as well as the materials to establish cfeditworthiness ofthe third parties. This Court also notices that the share applicants had contended that the amounts were received by them on account oftransfer oftheir assets atthe relevanttime.
In these circumstances, having regard to the law , that the' assessee is not required to prove source ofthe source but rather only discharge the,initial burden placed on it under Section 68, we find no infirmity with the impugned order,No substantial question of law arises. The appeal is accordingly dismissed.
S.RAVINDRABHAT,J DECEMBER07,2016 ajk NAJm WAZIRI,J
HON'BLE MR.JUSTICE NAJMIWAZIRI
07.12.2016 In the appeal under Section 260A ofthe Income Tax Act, 1961
[hereafter "the Act"], the revenue is aggrieved by the order of the
Income Tax Appellate Tribunal(ITAT)which confirmed the decision ofthe CIT(Appeals)on the question ofaddition under Section 68 of the Act. ;
During the relevant period, i.e. AY 2006-07, the assessee had inter «//« claimed in its returns that it received large sums of money from third parties on account ofcapital issue. The Assessing Officer
(AO)doubted the genuineness ofthe source offunds,added these and broughtthem to tax.In the appellate proceedirigs,CIT(A),based upon additional materials, furnished during the course ofthe proceedings, sought a remand report.In the remand proceedings,the AO called the share applicants and also sought details and particulars. The share
2016:DHC:8402-DB applicants complied to the communication, and provided details,of
PAN numbers, filed copies of the income tax returns along with balance sheets, profit and loss accounts, bank statements and other relevant materials. The remand report concluded that the share applicants, after furnishing these particulars did not choose to appear further. These materials were categorically considered by the CIT(A) who noted thatthe identity ofthe share applicants and ofthe financial particulars, PAN numbers. It returns, names of banks, the channel through which the funds were spentin respect ofthe share applicants, profit and loss accounts, balance sheets, bank statements of four applicants during the relevant period showing the relevant transactions etc. had been disclosed. The CIT(A),therefore, held that the assessee had discharged the burden of proving three-pronged requirements under Section 68 of the Act, i.e. identity of the share applicants, genuineness ofthe transaction and creditworthiness ofthe investor. So concluding, the CIT(A)allowed the appeal. This order was confirmed by the ITAT.
It is urged on behalf ofthe revenue that the CIT(A)ignored, and overlooked the incriminating statements made by the accommodation entry providers, who had clearly stated that the sums of money reached through bogus entries and that in reality, the amounts had to be added under Section 68. It was submitted that absence of the share applicants after a point of time led to- the inference thatthere was no genuineness asto the transaction.
This Court is ofthe opinion the the requirements ofSection 68 as spelt out in CIT v. Lovely Exports Pvt. Ltd. 2008(299)ITR 268
(SC) have been complied with. The assessee did all, that it was/ required to do - provide the identity ofthe shareholders,the financials relating to. transactions as well as the materials to establish cfeditworthiness ofthe third parties. This Court also notices that the share applicants had contended that the amounts were received by them on account oftransfer oftheir assets atthe relevanttime.
In these circumstances, having regard to the law , that the' assessee is not required to prove source ofthe source but rather only discharge the,initial burden placed on it under Section 68, we find no infirmity with the impugned order,No substantial question of law arises. The appeal is accordingly dismissed.
S.RAVINDRABHAT,J DECEMBER07,2016 ajk NAJm WAZIRI,J
JUDGMENT