TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 683
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....tive of the fact of non consideration of the facts either discussed or appreciated as found by the First Appellate Authority while rendering his decision in favour of the Appellant " 2. The assessing authority, in the course of completing a assessment for AY 2001-02 in terms of the Income Tax Act (in short Act), noticed that the share capital of the appellant was an amount of Rs. 50 lakhs, of which a sum of Rs. 49,74,000/- had been introduced during the relevant financial year. An enquiry was launched in response to which the assessee duly responded furnishing the names and addresses of the contributors. Summons were issued and the contributors examined. The assessing authority records detailed findings to the effect that while the identity of the creditors was furnished, neither their credit worthiness, nor the genuineness of the transaction was established. The examination also revealed various discrepancies in the dates and amounts of the contributions vis-`-vis the statements recorded from the contributors and the details furnished by the appellant. A total of 28 persons were summoned and statements recorded. 25 out of the 28 were agriculturists. Of the remaining, one was an e....
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....vision Bench of Delhi High Court in DCIT vs. Rana Girders (84 CCH 128), Gujarat High Court in Hindustan Inks and resins Ltd vs. DCIT (60 DTR 18), Allahabadh High Court in CIT vs. Misra Preservers (P Ltd) (350 ITR 222) Chatisgarh High Court in ACIT vs. Venkakateshwar Ispat (P Ltd.) ( 319 ITR 393) Delhi High Court in CIT vs. Sri Rram Syal Hydro Power (P Ltd.) (196 Taxman 441) Punjab and Haryana High Court in CIT vs. GP International Ltd Karnataka High Court in CIT and others vs. Mulberry International Silk (68 DTR 149) and CIT and another vs. Arunanandha Textiles Pvt Ltd. (333 ITR 116) and the Jurisdictional High Court in CIT vs. Pranav Foundations in TC(A) 266 of 2014), CIT vs. Electro Polycon Ltd (294 ITR 661) and CIT vs. Victory Spinning Mills Ltd (90 CCH 55). 7. On the other hand, Mr. Ravikumar, learned counsel would contend that the provisions of Section 68 of the Act and the requirements there under would not stand effaced merely because the transaction happened to be projected as one of a contribution towards share capital. He would draw our attention to the following observations of the Full Bench of the Delhi High Court in Sophia Finance (Supra). "The Income-tax Officer w....
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....ed to be not satisfactory; unless (a)the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b)such explanation in the option of the Assessing Officer aforesaid has been found to be satisfactory; 10. Section 68 of the Income Tax Act is a provision that enables the assessment of any sum found credited in the books of an assessee where no satisfactory explanation is offered by the assessee to explain the same. Courts have consistently held that the three guiding principles in the context of section 68 would be the establishment of the identity and credit worthiness of the creditor and the genuineness of the transaction. In the present case, only the first of the three conditions has been established by the assessee. Neither the credit worthiness nor the genuineness stand explained. The stand of the assessee to the effect that any transaction styled as a contribution to sharecapital would stand excluded from the purview of Section 68 is too wide to be accepted. The language of Section 68 does not admit of such an interpretation. In fact, it would indicate ....
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....lhi High Court in CIT Vs. Lovely Exports (216 CTR 195). The distinguishing features that would set apart that case from the present one are detailed below:- (i) payments made through banking channels, whereas in the present case , payments are in cash and no receipts or any proof thereof has been produced. (ii) Several of the contributors were assessed to tax and details of the assessments furnished. In the present case, none of the contributors were assessed to tax, barring one, in whose case also no particulars were furnished in this regard. (iii) The finding of the authorities is to the effect that the assessing officer had neither controverted, nor disapproved the material filed by the assessee whereas in this case, no material whatsoever was produced to establish proof of payment by the contributors, their credit worthiness or genuineness of the transaction. 15. The clear and distinguishing distinction of fact is that the assessing officer, in that case, had not met or controverted the details furnished by the assessee. It was in the above circumstances, and on account of such failure that the tribunal, the highest fact finding body and High Court in confirmation thereo....