Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 32 - AT - Income TaxAddition u/s 68 - unexplained cash credit in respect of share capital and share premium received - HELD THAT:- We note that if at all these investments are made by bogus investors, then the AO is free to proceed against those investors as the assessee has provided all the details such as addresses, PAN numbers etc. of the investors to the AO and thus no addition can be made under section 68 of the Act in the hands of the assessee as has been held by the Hon’ble Apex Court in the case of CIT vs. Lovely Exports Pvt. Ltd [2008 (1) TMI 575 - SC ORDER] which has been followed in the case of CIT vs. Gagandeep Infrastructure Pvt. Ltd [2017 (3) TMI 1263 - BOMBAY HIGH COURT] and CIT vs. Orchid Industries Pvt. Ltd. [2017 (7) TMI 613 - BOMBAY HIGH COURT] We also note that the assessee has specifically requested the AO to provide cross examination to the assessee which has not been provided and on this count also the assessee finds support from the decision of Apex Court in the case of Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] and Krishnachand Chellaram [1980 (9) TMI 3 - SUPREME COURT] wherein it has been held that additions can not be made without giving an opportunity of cross examination to the assessee - In view of these facts and the ratio laid down by the various judicial forums, we are inclined to set aside the order of Ld. CIT(A) and direct the AO to delete the addition as the assessee has proved all three ingredients of section 68 of the Act i.e. identity, creditworthiness of the investors and genuineness of the transactions. The ground no. 1 is allowed. Addition u/s 68 in respect of share application/unsecured loans received from M/s. Shyam Alcohol Chemical Ltd. - We note that the assessee has filed the ITRs, confirmations and bank statements from the lender/investor. The assessee has also filed before the AO the letter informing that the entire share application money has been paid subsequently. We also note that the lender has responded to the notice issued under section 133(6) of the Act by filing various documents therewith such as balance sheet, bank statements etc. beside filing affidavit of Shri Vipul Vidur Bhatt and thus confirmed the loan transactions. In our opinion, the issue decided in ground No.1 above is quite similar to the issue raised in the second ground by the assessee and therefore, our finding in ground No.1 would, mutatis mutandis, apply to this ground as well. Accordingly, we hold that assessee has proved the identity, creditworthiness of the lenders/investors and genuineness of the transactions. Resultantly, the order of Ld. CIT(A) is set aside and AO is directed to delete the addition.
|