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2024 (1) TMI 973 - HC - Income TaxAddition u/s 68 - assessee has failed to explain the nature and source of the fund/FCCB proceeds - AO has treated proceeds of FCCB as deemed income of assessee on the ground that assessee has not supplied information about details of actual bond holders and ultimate beneficiaries - HELD THAT:- Tribunal in the case of Reliance Communication [2013 (2) TMI 387 - ITAT MUMBAI] while deciding the issue came to a conclusion that assessee was only required to prove the identity, capacity and creditworthiness of the entity that subscribed to its issue of FCCB, which is not in doubt. Assessee having received the amount of subscription of the fund from the said entity, has also not been denied. The fact that global certificate in respect of the bonds was also issued to the said entity, is also not disputed and, therefore, the Tribunal accepted that assessee has adequately discharged the onus cast upon it in terms of Section 68 - Tribunal concluded that assessee did not have an obligation to prove the identity, capacity and creditworthiness of the actual subscriber, i.e., the sources source. The said order in the case of Reliance Communication Ltd passed by the Tribunal was impugned by the revenue in this court u/s 260A of the Act. The same issue as raised in case at hand was raised therein. The appeal was dismissed, against which an SLP was preferred by the revenue. The SLP also came to be dismissed. Tribunal in the case at hand has concluded and rightly so that the facts in the case of Reliance Communication Ltd are similar to assessee’s case in the case at hand and the ground raised by revenue were also identical. Therefore, on facts the Tribunal correctly came to the conclusion that the nature and source of funds of FCCB is fully explained and the addition under Section 68 of the Act made by the AO in the reassessment proceedings was not correct. Decided in favour of assessee.
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