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2018 (10) TMI 129 - AT - Income TaxAddition on account of share application money on protective basis u/s 68 - Identity of the investor credit worthiness and genuineness - Held that:- Evidences placed by the assessee establish that the sufficient sources are available to Shri K. Srinivasa Rao to make the investment of ₹ 98,00,000/-. CIT(A) the assessee has given complete cash trail and cash flow to explain the sources and the department did not bring any evidence to controvert the finding given by the CIT(A). In the instant case, Identity of the investor credit worthiness and genuineness is established and we do not find any reason to interfere with the order of the CIT(A) and the same is upheld. In the assessee’s case, the addition was made on protective basis in the hands of the assessee company and completed the assessment of Shri K.Srinivasa Rao on substantive basis. Once the assessment is made on substantive basis on the correct person, the protective assessment has no legs to stand and required to be deleted. On this reason also we delete the addition made by the AO. Accordingly the appeal of the revenue on this ground is dismissed. Addition u/s 69 - Held that:- The fact that the assessee had remitted the funds of ₹ 92.54 lakhs from banking channels and raised the loans with Dhanalakshmi Bank for an amount of ₹ 1,19,44,000/- was not disputed by the AO. As observed by the Ld.CIT(A), there was cash balance of ₹ 1,52,78,047/- as per the financial statement submitted by Shri K.Srinivasa Rao as at the end of 31.03.2010. From the above, it is established that Shri K.Srinivasa Rao is having sufficient source to make the investment of share application money in the company. Therefore, there is no case for suspecting the genuineness of the transaction having established the identity, credit worthiness and source of the capital. Hence, there is no case of making the addition u/s 69, accordingly, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue.
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