2023 (7) TMI 329 - AT - Income Tax

Tribunal upholds CIT(A) order, dismissing assessee's appeal on Sections 68 and 69C additions.

Alanice Computer Services P. Ltd, Versus ITO, Ward-10 (1) New Delhi

Alanice Computer Services P. Ltd, Versus ITO, Ward-10 (1) New Delhi - TMI Issues Involved:1. Validity of the assessment order under Section 143(3) of the Act.2. Addition of Rs. 20,19,23,500/- under Section 68 of the Act.3. Relevance of Section 197(c) of the Finance Act, 2016.4. Identity, creditworthiness of shareholders, and genuineness of the transaction.5. Addition of Rs. 40,38,470/- under Section 69C of the Act.Summary of Judgment:1. Validity of the Assessment Order:The assessee challenged the assessment order passed under Section 143(3) of the Act, claiming it to be arbitrary, injudicious, invalid, and bad at law. However, no substantial evidence was provided to counter the findings of the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)].2. Addition under Section 68 of the Act:The AO made an addition of Rs. 20,19,23,500/- on account of unexplained cash credits, which was upheld by the CIT(A). The assessee argued that no cash credit was received and the shares were issued against investments, not cash. The Tribunal found that the assessee failed to provide evidence to substantiate its claims, including the identity, creditworthiness, and genuineness of the shareholders.3. Relevance of Section 197(c) of the Finance Act, 2016:The assessee contended that the reference to Section 197(c) by the AO and CIT(A) was misplaced. However, the Tribunal did not find this argument sufficient to overturn the additions made.4. Identity, Creditworthiness, and Genuineness:The AO and CIT(A) alleged that the assessee failed to establish the identity and creditworthiness of the shareholders and the genuineness of the transaction of allotment of shares. The Tribunal noted that the assessee did not provide necessary documents or attend hearings to substantiate its claims.5. Addition under Section 69C of the Act:The AO added Rs. 40,38,470/- under Section 69C, alleging that the assessee paid a 2% commission on the share capital and premium. The assessee argued that no such expenditure was incurred and that the addition was based on conjecture. The Tribunal upheld the AO's addition, noting the lack of evidence from the assessee to counter the claim.Conclusion:The Tribunal affirmed the order of the CIT(A), dismissing the appeal of the assessee. The additions under Sections 68 and 69C were upheld due to the assessee's failure to provide sufficient evidence and rebut the findings of the revenue authorities. The appeal was dismissed in its entirety.