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2015 (11) TMI 282 - DELHI HIGH COURT

2015 (11) TMI 282 - DELHI HIGH COURT - TMI - Unexplained increase in shares capital - CIT(A) deleted the addition confirmed by ITAT - Held that:- Assessee has furnished details of all the 14 subscribers from whom funds had been received by way of share application money. The money was also shown to have been received through banking channels. After obtaining a remand report from the AO, the CIT (A) concluded that "the AO has not commented anything adverse" on the additional evidences, copies of .....

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t revenue.

Unexplained increase in sundry creditors - CIT(A) deleted the addition confirmed by ITAT - Held that:- The increase in sundry debtors was interlinked with the increase in the sundry creditors and both were on account of the "pure business transaction of purchases and sale of share." The CIT(A) was satisfied that the increase in sundry creditors stands fully explained and established by the Assessee. The ITAT, while observing that "there is no presumption that if increase in .....

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Held that:- CIT (A) deleted the disallowance on the ground that the AO had not spelt out any basis for making the 50% disallowance and that there was no justification for such a huge addition. The ITAT agreed with the CIT (A) that no case for making ad hoc disallowance was made by the AO. The Revenue is not able to persuade this Court to interfere with the impugned order of the ITAT which appears to be on a sound legal basis. - Decided against revenue.

Addition on account of stock in .....

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ed for the closing stock which necessarily had to be routed through the profit and loss account. Since no adverse comment has been made by the auditor and since the same method of accounting had been followed by the Assessee in the earlier as well as the subsequent year, the CIT (A) concluded that there was no justification for the addition. - Decided against revenue. - ITA No. 1869/2010 - Dated:- 5-10-2015 - S. Muralidhar And Vibhu Bakhru, JJ. For the Petitioner : Mr Kamal Sawhney, Senior Stand .....

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ermination: (1) Whether learned Income Tax Appellate Tribunal/Commissioner of Income Tax (Appeals) erred in deleting the addition of ₹ 13,57,50,000 made by the Assessing Officer on account of unexplained increase in shares capital? (2) Whether learned Income Tax Appellate Tribunal/Commissioner of Income Tax (Appeals) erred in deleting the addition of ₹ 19,98,774 made by the Assessing Officer on account of unexplained increase in sundry creditors? (3) Whether learned Income Tax Appell .....

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Question No. 1: Concerning the alleged unexplained increase in shares capital 3. The Assessee, Kuber Securities Limited, filed its return of income on 30th November 1997 disclosing a net loss of ₹ 3,93,28,695. The Assessing Officer ('AO') processed the return under Section 143 (1) (a) of the Act. The AO noted that there has been an increase in the share capital during the year under the head 'Share Application Money' from Rs. Nil as on 31st March 1996 to ₹ 13,27,50,00 .....

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money was also shown to have been received through banking channels. After obtaining a remand report from the AO, the CIT (A) concluded that "the AO has not commented anything adverse" on the additional evidences, copies of accounts and bank statements furnished by the Assessee to the AO. The AO has not disapproved/doubted "the identity and the genuinely of the subscribers." The CIT(A) accordingly concluded that "all ingredients of Section 68 stands satisfied as far as t .....

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show it to be perverse. The Court finds no reason to interfere with the impugned order of the ITAT. Question No. 2: Concerning the alleged unexplained increase in sundry creditors to the extent of ₹ 19,98,714. 6. The AO made an addition on the basis of the increase in the total balance of sundry creditors as no details of the confirmation from the sundry creditors or proof of their identity or creditworthiness were furnished. The CIT (A) noted the submission of the Assessee that the increa .....

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d sale of share." The CIT(A) was satisfied that the increase in sundry creditors stands fully explained and established by the Assessee. The ITAT, while observing that "there is no presumption that if increase in sundry creditors is proved, the increase in sundry debtors should also be taken as proved", found that the AO did not examine the details of each credit entry as was required by Section 68 and affirmed the decision of the CIT (A). On this issue this Court finds that the R .....

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