Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (2) TMI 71 - AT - Income TaxAddition u/s 68 - Unexplained share capital - As alleged assessee failed to prove the genuineness of the share application money received - HELD THAT:- The assessee has received ₹ 3,50,000/- from Smt. Renu Rekhan and ₹ 6 lacs from Smt. Nisha Rekhan on account of share application money. The assessee has filed their confirmation and copy of the ITR, but, in the confirmation it is not mentioned whether share application money have been given in cash or through Bank account. No evidence of their creditworthiness have been filed. Thus, assessee failed to prove the genuineness of the share application money received from these two ladies. In the absence of adequate evidence, the authorities below were justified in making the addition. We, therefore, confirm the addition and dismiss this ground of appeal. Unsecured loans from 05 parties - parties have not appeared before A.O. in response to the summons under section 131 - In the case of Star Technosoft Pvt. Ltd., assessee has filed letter before A.O. in which assessee has explained that the assessee is making efforts to get the bank statements and in case of urgency the same may be summoned from the concerned Bank of the creditors. The assessee also requested that this creditor may be summoned under section 131 - Since the A.O. did not take any steps in the matter, therefore, no adverse inference could be drawn against the assessee in respect of the creditor Star Technosoft Pvt. Ltd. A.O. has found that income of the creditor is low as compared to the corresponding transaction, but, their bank statements clearly show they have sufficient means to give loan to the assessee and in case of two of the creditors even their income was higher as compared to the loan given to the assessee. Merely because low income is shown in the return of income by the creditor is no ground to make any addition against the assessee. In the case of creditor Kshitiz Infratech Pvt. Ltd., the A.O. from the balance sheet found that amount of ₹ 50 lakh have been shown as advance against the property, but, it is a fact that this creditor has given an amount of ₹ 50 lakhs to the assessee, therefore, no further adverse inference could be taken against the assessee. The authorities below have also rejected the explanation of assessee because the creditors did not appear in response to the summons issued by the A.O. Dated 17.05.2018 for the date fix for 24.05.2018. A.O. issued summons under section 131 to enforce the attendance of the creditors at the fag end of the assessment. The first date was fixed for 24.05.2018 only and assessment have been framed on 31.05.2018. Thus, the Learned Counsel for the Assessee rightly contended that no sufficient time was given to the creditors to appear before A.O. in response to the summons under section 131 - no time have been given to the assessee to enforce the attendance of these creditors before A.O. It is also well settled Law assessee need not to prove the source of the source. In A.Y. 2010-2011 the same Ld. CIT(A) passed the Order on 06.07.2020 and on production of the sale deed found that creditworthiness of the creditor is established. It is held in this year that mere non-compliance of the summon is not sufficient to make the addition under section 68 of the Income Tax Act, 1961, where identity, genuineness and creditworthiness stands established. Thus, there was no reason for the Ld. CIT(A) to take a different view in assessment year under appeal i.e., 2009-2010. Initial burden upon the assessee to prove identity of the creditors, their creditworthiness and genuineness of the transaction have been discharged. A.O. did not bring any evidence on record to disbelieve the explanation of the assessee or the documentary evidence filed on record. In view of the above, we set aside the Orders of the authorities below and delete the addition - on account of 05 creditors above. This ground of appeal is allowed.
|