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2016 (12) TMI 617 - DELHI HIGH COURT

2016 (12) TMI 617 - DELHI HIGH COURT - TMI - Addition u/s 68 - CIT (A) and the ITAT deleted the additions made - Held that:- The CIT (A)’s reasoning that the materials clearly pointed to the share applicants’ possessing substantial means to invest in the assessee’s company. The AO seized certain material to say that minimal or insubstantial amounts was paid as tax by such share applicants and did not carry out a deeper analysis or rather chose to ignore it. In these circumstances, the inferences .....

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red with and affirmed the appellate Commissioner s order directing the cancellation of an amount of ₹ 25,00,96,500/-. It is urged that having regard to the law laid down in relation to Section 68 of the Income Tax Act, 1961, the concurrent findings of the CIT (A) and ITAT are unsustainable. 2. The assessee which engages itself in investment business with capital markets received notice under Section 153C pursuant to search initiated on Jakson Group and Associates on 10.02.2010. The assesse .....

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ness of the identity of the share applicants, genuineness of the transactions and the investors credit worthiness had not been established in accordance with the authority in CIT v. Lovely Exports, (2008) 216 CTR 195 (SC). 3. The assessee s appeal to the Commissioner succeeded. The Commissioner noticed that the details of the share applicants such as their income tax returns as well as the net worth were available on the file of the assessment record. Based upon analysis and the submissions, the .....

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llant had duly discharged its onus by submitting necessary evidence available to establish the bona fide of the transactions. Thereafter, the onus shifted on the revenue to prove that the claim of the appellant was factually incorrect. Simply by pointing out that the claim of the appellant was factually incorrect. Simply by pointing out that the applicant companies did not have sufficient income or that the bank accounts indicated credits and debits in rapid succession leaving little balance doe .....

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ust act in a fair and not a partisan manner. Although it is part of their duty to ensure that no tax which is legitimately due from the assessee should remain unrecovered, they must also at the same time not act in a manner as might indicate that scales are weighted against the assessee. It is impossible to subscribe to the view that unless those authorities exercise the power in a manner most beneficial to the revenue and consequently most adverse to the assessee, they should be deemed to have .....

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lling the additions made. It is submitted that the genuineness of the transactions and the credit worthiness is suspect in the circumstances of the case. Learned counsel relied upon a tabular chart prepared by the AO to submit that most of the share applicants had paid little or no income tax and that analysis of the bank statements furnished by such investors revealed that the amounts were deposited in cash and also routed through different entities. It was submitted that whereas the identity o .....

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of the companies that had invested in the course of the share offerings, of the applicant. The chart extracted in paragraph 4.2 of the CIT (A) s order is reproduced below: - S.No. Name of Party PAN NO. Amount of investment in shares Net worth as on 31.3.06 1 M/s Golden Suppliers Pvt. Ltd. AADCG0724F 5,723,250.00 2 M/s Web Tech International Ltd. AAACW4551F 4,231,500.00 9,936,107.00 3 M/s Well Plan Corp. Management Pvt. Ltd. AAACW2580N 570,000.00 12,551,638.00 4 M/s Triveni Tower Pvt. Ltd. AABCT .....

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