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2016 (4) TMI 85 - ITAT DELHI

2016 (4) TMI 85 - ITAT DELHI - TMI - Addition u/s 68 - creditor from the foreign country - Held that:- In the light of documentary evidence on record, the burden was on the Assessing Officer to establish that share capital is represented by undisclosed income of the company. As already clarified, Sh. Suveer Arora has been regularly visiting Delhi and which has never been disputed. A copy of the passport was also filed which contains the particulars of his visit to India. Further, verification of .....

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assessment as his identity and assessment particulars are not in dispute. From the above, the assessee has already established the identity, source and genuineness of share capital in the light of documents produced and settled legal principles clarified above. Even the Assessing Officer has also not disputed the identity, source and genuineness of share capital. We are also of the view that it is unnecessary burden upon the assessee by pressuring it to bring the creditor from the foreign count .....

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it balance - addition on account of difference between confirmations received from the party and balance appearing in the books of the assessee - Held that:- The reconciliation statement was filed during the assessment proceeding vide letter dated 05.02.2013 in which the difference was duly explained and as such the observation of Assessing Officer seems to be factually incorrect and addition made by the AO and confirmed by the Ld. CIT(A) needs to be deleted. - Decided in favour of assessee - I. .....

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in confirming addition of ₹ 3,10,00,000/- on the alleged ground of unexplained share capital investment by Sh. Suveer Arora. (ii) That Ld. CIT(A) has totally disregarded various documentary evidences in support of investment of share capital including assessment order in the case of Sh. Suveer Arora for the very same year passed u/s. 143(3) and confirmed addition on the presumption and surmise and hypothetical grounds. (iii) That share holder being a regular income tax assessee and the fac .....

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the CIT(A) was not justified in confirming addition of ₹ 23,280/- as unexplained credit balance relating to M/s Orient Fashion Export (India) Pvt. Ltd. (ii) That addition is without proper appreciation of facts and merely based on presumption and surmises. 3. That orders of the lower authorities are not justified on facts and the same are bad in law. 2. The brief facts of the case are that during the year, the assessee was engaged in the business of manufacturing and exporting of readymad .....

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pleted the assessment at an income of ₹ 3,61,23,345/- by passing the order dated 30.3.2013 u/s. 143(3) of the I.T. Act, 1961 and made various additions. 3. Against the order of the Ld. AO, assessee appealed before the Ld. CIT(A), who vide impugned order dated 21.12.2015 has partly allowed the appeal of the assessee. 4. Aggrieved with the order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 5. Ld. Counsel of the Assessee stated that assessee has filed all necessary documentar .....

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N Card of Sh. Suveer Arora, Copy of Bank Statement regarding investment in share; copy of income tax return and assessment order passed u/s. 143(3) of the I.T. Act, 1961 for the AY 2010-11; copy of letter dated 14.2.2013 written to the Assistant Director of Income Tax (Int. Taxation), New Delhi in the case of Suveer Arora regarding the regular assessment u/s. 143(3) of the I.T. Act and the Affidavit dated 5.4.2013 of Suveer Arora which is at Page 64 of the PB confirming the investment of the amo .....

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authority for establishing the creditworthiness, identity and genuineness of the transactions. The Revenue Authority only emphasize upon the personal appearance of the creditor i.e. Sh. Suveer Arora who is an NRI which is contrary to the law and facts on record. He also draw our attention towards the order passed by the AO as well as Ld. CIT(A) on the issue in dispute and stated that there is no dispute that Sh. Suveer Arora is a regular Income Tax assessee in Delhi and the facts of share capita .....

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se of Sh. Suveer Arora. He stated that inspite of these facts the addition in dispute has been made by the Revenue Authorities which deserve to be deleted. In support of his contention he relied upon the following case laws and stated that the issue in dispute is squarely covered by these decisions and requested to delete the addition in dispute. - CIT vs. Rhombus International Pvt. Ltd. (ITA No. 223/13) - CIT vs. Gangeshwari Metal (P) Ltd. (2014) 361 ITR 10 (Delhi) (HC) - CIT vs. Kamdhenu Steel .....

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ts Ltd. 177 Taxman 331 (Del) - CIT vs. Value Capital Services Pvt. Ltd. 307 ITR 0334 (Delhi) - Pr. CIT vs. Rakam Money Matters P Ltd. (Delhi HC) - CIT vs. Vrindavan Farms P Ltd. (Delhi HC) - ITO vs. Hare Krishna International ltd. (Delhi ITAT) - MOD Creations P Ltd. vs. ITO (2013) 354 ITR 282 (Del.) - CIT vs. Lovely Exports Pvt. Ltd. (2009) 319 ITR 5 (SC). 6. Ld. DR relied upon the orders of the authorities below. He stated that the primary onus is on the assessee to prove that it did not take a .....

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ase laws cited by both the parties. With regard to deletion of addition of ₹ 3,10,00,000/- made u/s. 68 is concerned, we find that the share capital was received from Sh. Suveer Arora an NRI who is resident of Netherland. He is also a regular income tax assessee in Delhi under permanent account no. AGYP A2276N and the assessment for the year under reference itself has been completed u/s. 143(3). He has having vast experience in the field of garment trade and is associated with M/s Mexx Gro .....

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howing the investment made and source thereof. d. Copy of Form No.2 regarding allotment of shares e. Copy of Passport of Mr. Suveer Arora f. Copy of Income Tax Return and assessment order passed uls. 143(3) for A.Y. 2010-11. g. Copy of letter dated 14.02.2013 during the assessment proceedings in the case of Sh. Suveer Arora in respect to issue of share capital to assessee. h. Affidavit of Sh. Suveer Arora. 7.1 We find from the assessment order that the Assessing Officer has not disputed the corr .....

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account payee cheques and copy of the bank statement has also been placed on record and the share capital is corroborated from his bank statement. As already clarified the assessment of share holder Sh. Suveer Arora for this very assessment year was completed uls 143(3) and the issue of share capital was duly considered and verified. The factual position to this effect is corroborated from letter dated 14.02.2013 furnished during the course of assessment proceedings in the case of Sh. Suveer Aro .....

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ictitious or name lenders. Assessing Officer did not conduct any investigation by sending Inspector to the address and nothing has been brought on record to show steps or attempt by the assessing officer to go deeper and find out/check veracity of the assertion. The share application money addition is not in isolation but has to be examined with other additions on similar grounds. Absence of verification, different additions made and reasoning given for deleting the additions are plausible. The .....

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ory letters of share applicants, copies of their bank statements etc. The Assessing Officer found the assessee's explanation to be unacceptable and, consequently, added the amount of share application money to assessee's taxable income which was deleted by the Commissioner(Appeals). The Tribunal upheld the order of the Commissioner (Appeals).On appeal High Court held that, there was a clear lack of inquiry on the part of the Assessing Officer once the assessee had furnished all the relev .....

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s, as the documents produced earlier by the assessee either become suspect or are rendered insufficient in view of the material produced by the Department rebutting the assessee's documentary evidence?" Decided in Favour of : Assessee Held: The Hon'ble Supreme Court has dismissed the Special Leave Petition filed by the Revenue against the decision of Hon'ble Delhi High Court in the case CIT v. Kamdhenu Steel & Alloys Ltd. [2014] 361 ITR 220 in which it has been held: Cash cr .....

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to assessee from his NRE account, no addition could be made under section 68 on that account. 7.2 In the light of the fact that share capital was through NRE account no. 0369040200000017 with J&K Bank, Vasant Vihar, New Delhi. (Mentioned at page no. 54 of the Paper Book vide Confirmation dated 12th March, 2013) which is part of his assessment record, the issue of source and remittance to NRE account is fully supported and verifiable as the assessment for year under reference was completed u/ .....

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ted. A copy of the passport was also filed which contains the particulars of his visit to India. Further, verification of remittances in his 'NRE accounts under FEMA are relevant in his personal assessment as NRE account is part of record and as such these technical observations have no relevance or bearing to the issue of share capital. In fact, the Assessing Officer has made only general observation and not disputed or commented on the document including the assessment order and bank state .....

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lso of the view that it is unnecessary burden upon the assessee by pressuring it to bring the creditor from the foreign country which is contrary to the facts of the case as well as evidence produced by the assessee. 7.3 Besides, above case laws, the Hon ble Apex Court also in the case of CIT Vs. Lovely Exports 216 CTR 195 has held that that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the .....

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had concededly reported far less income than the amounts invested. However, in the present case the following documents were filed before the lower authorities: a. Confirmation from Mr. Suveer Arora b. Copy of PAN Card of Mr. Suveer Arora c. Copy of Bank Statement showing the investment made and source thereof. d. Copy of Form No.2 regarding allotment of shares e. Copy of Passport of Mr. Suveer Arora f. Copy of Income Tax Return and assessment order passed uls. 143(3) for A.Y. 2010-11. g. Copy o .....

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