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2023 (2) TMI 698 - AT - Income TaxAddition u/s 68 - unexplained share application money - establishing a factum of conduit company - HELD THAT:- In present case that the 40 investor companies, who invested the amount in the assessee company as share application money are not part of Keti Construction group of companies and in this situation, the onus lay upon the shoulders of the assessee cannot be held discharged in absence of substantiating the factum of capacity and credit worthiness of the investor companies and genuineness of the transaction. As in the present case, the assessee cannot be held as conduit company because capacity and credit worthiness of 40 companies who invested share application money in the assessee company and genuineness of transaction has not been established. Assessee cannot be held as intermediary company because the assessee has not successfully established that the source companies are also group companies and it is working merely as middleman entity and a conduit company. Therefore, the benefit of the judgements relied on by the assessee in the case of Omni Farms Pvt. Ltd. [2015 (1) TMI 1119 - ITAT DELHI], Vijay Conductors India Pvt. Ltd. [2015 (9) TMI 1519 - DELHI HIGH COURT] and AGM Holdings Ltd. [2016 (3) TMI 1449 - ITAT DELHI] is not available for the assessee in the present case having distinct and dissimilar facts as the assessee could not substantiate the fact that it is a conduit company of Keti group of companies. Therefore, we are inclined to hold that since the assessee company has not discharged the onus lay on the shoulders of it that it is a conduit company and also has not successfully proved and established the identity, capacity and credit worthiness of 40 investor companies and genuineness of the transaction, therefore, the AO was right in making addition in the hands of the assessee u/s 68 of the Act and the ld.CIT(A) was also correct in confirming the same. Decided against assessee.
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