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PR. CIT Versus Rakam Money Matters Pvt. Ltd.

2015 (10) TMI 2057 - DELHI HIGH COURT

Addition under Section 68 - undisclosed share application/capital money received by the Assessee - CIT(A) and ITAT delted the addition - Held that:- It is not in dispute that extensive material was produced by the Assessee in the present case to prove the identity, genuineness and creditworthiness of the companies who had subscribed to its shares. Among the materials produced were the Income Tax Returns and the PAN card details of the eight companies. Even if the Directors of these companies did .....

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produced.

The view taken by the CIT(A) that the AO failed to come up with the material to disprove what had been produced by the Assessee is certainly a plausible view in the facts and circumstances of the case. Likewise, the view taken by the ITAT concurring with the CIT(A) on facts cannot be said to be perverse. - Decided in favour of assessee. - ITA 778/2015 - Dated:- 13-10-2015 - Dr. S. Muralidhar And Vibhu Bakhru, JJ. For the Appellant : Mr N.P. Sahni, Senior Standing Counsel wi .....

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ed before the Court by the Revenue is whether the ITAT was correct in law in affirming the order of the Commissioner of Income Tax (Appeals) [ CIT (A) ] deleting the addition in the sum of ₹ 60,00,000/- made by the Assessing Officer ( AO ) to the income of the Assessee under Section 68 of the Act pertaining to share application/capital money received by the Assessee. 5. The Assessee filed its return of income for AY 2003-04 on 02nd December, 2003 declaring an income of ₹ 5,64,556/-. .....

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had made payments by account payee cheques of various sums of money towards subscription of shares of the Assessee. The Assessee also produced the income tax returns, PAN numbers, copies of bank statements of the aforementioned companies, affidavits by way of confirmation on behalf of the said companies confirming that the payments towards share application money were made, copies of details in the Registrar of Companies showing the status of the companies as active , copies of the balance sheet .....

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ated a common pattern where the balance would be very low up to a certain date and then substantial amounts were deposited either by cash or cheque to increase the balance and thereafter invariably withdrawn within a day or two. Since the process was shown to be repeated over and over in the P&L Account of the Assessee, the AO concluded that there was no business activity worthy of mention. Concluding that the Assessee had failed to discharge the onus to prove the genuineness or the creditwo .....

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tements made in the course of that investigation were also not provided to the Assessee. In those circumstances, the CIT (A) found that the addition proposed by the AO was not justified. 9. In the impugned order, the ITAT concurred with the finding of the CIT (A) on facts. The ITAT noted that the main basis for making of the addition by the AO was the information received from the DIT (Investigation). The process of examination of the Directors by issue of summons was "not taken to the logi .....

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arned Senior Standing Counsel for the Revenue, did not dispute the fact that the report of the DIT (Investigation) or that the statements recorded during the course of the investigation were not put to the Assessee. He placed reliance on the decision of this Court dated 28th November, 2013 in ITA No. 341/2012 (CIT v. MAF Academy P. Ltd.) the decision dated 7th January, 2013 in ITA No. 120/2012 (CIT v. Nipun Builders & Developers Pvt. Ltd.) and the decision dated 31st January, 2011 in ITA No. .....

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2. A perusal of the order of the AO shows that its foundation is the report of the DIT (Investigation). Admittedly, the Assessee was not confronted with that material in the course of the reassessment proceedings. The Assessee was also not confronted with the statements recorded in the course of the investigation. Once that material is kept aside then the scope of enquiry can only be whether the Assessee has produced documents to discharge the initial onus of proving the genuineness and creditwo .....

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