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2024 (5) TMI 649 - BOMBAY HIGH COURTAddition u/s 68 - unexplained credit appearing in his books of account - share application money - Discharge of burden of proving the credit appearing in his books of account - transactions done by it with Smt. Sunitha, whereby funds were transferred to the Assessee Company and utilized by it - it is the Revenue’s case that the burden was upon the assessee to prove the genuineness and creditworthiness of the transaction, which in the present case it has failed to discharge - ITAT concluded that there was no material with the Revenue to conclude that this money was received from Mrs. Sunita against rendering of service by the Company to treat this transaction as a revenue receipt in the hands of the assessee. HELD THAT:- ITAT has applied the settled principle that when a receipt is sought to be taxed as income, and in this case there was no evidence to show that this receipt was towards rendering of services by the Company, in the light of the various documents produced by the assessee as proof of the transaction of allotment of shares against the amount received, it set aside the assessment order, insofar as the addition of Rs. 4.99 crores to the income of the assessee. The reasoning adopted by the ITAT is based upon a sound legal principle and reflected from the documents placed by the assessee before the assessment officer. The documents, which consist of return of allotment of shares, resolutions of the company, and other documents filed in terms of the Companies Act before the Authorities to substantiate the transaction had not been doubted. In addition, the record of the company petition filed by Mrs. N. Sunita before the High Court, which was ultimately disposed by consent terms filed by the parties by which Sunita was made 25% shareholder in the Company was also produced, but not considered by the AO. CIT(A) considered these documents, including the copy of the company petition and though it records that according to the consent terms, shares were allotted to N. Sunita to the extent of 25% of shareholding of the Company, it holds that the amount advanced was towards some other purpose such as against execution of a contract and not meant to be returned, resulting in the litigation. ITAT, on considering all this material, has concluded that there is no evidence found on the record that the amount was paid for availing of any service from the Company to treat the transaction as a revenue receipt in the hands of the Company. We are unable to disagree with the findings arrived at by the ITAT which appears to be fully based upon the material on record, and cannot be termed as perverse. Case of CIT vs. Sadiq Shaikh [2020 (10) TMI 1028 - BOMBAY HIGH COURT] would not apply to the facts of the present case as in the present case, as held by the ITAT on the basis of documentary evidence on record, the genuineness of the transaction was proved by the assessee who had discharged the burden which rested on it. The view taken by the ITAT cannot be faulted and is accordingly upheld. The two substantial questions of law are therefore answered in favour of the Respondent, and against the Revenue.
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