TaxTMI 
TaxTMI 
2024 (7) TMI 226
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....ssessment Officer passed an order of addition of Rs. 4,13,41,500/- under Section 68 of the Act, 1961 assigning the reason that share application money was received from bogus shell companies, which actually belong to the appellant. 3. According to the respondent, the case of the assessee company was selected for complete scrutiny to verify the share premium received during the year under consideration whereas the company has shown low income in comparison to high loans & advances and investment in share and the investment made in unlisted equities. The details were asked to be supplied about the shareholders who actually invested the money. Subsequently, in order to verify the genuineness and creditworthiness of the shareholding companies, a notice was issued under Section 133 (6) of the Act, 1961 to Kolkata based share companies namely M/s Eagle Commotrade Pvt. Ltd. and M/s Krishnakali Distributors Pvt Ltd at their registered address. The notices were returned unserved, consequently, the Assessment Officer deputed one Inspector to find out the identity of the companies. On a verification, it was found that the companies namely Eagle Commotrade Pvt. Ltd. and M/s Krishnakali Dist....
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....e non-existing, the present appellant having filed the return they are also part and parcel as a beneficiary. She placed her reliance in the law laid down by the Supreme Court in the matter of Principal Commissioner of Income Tax (Central-1) Vs. NRA Iron and Steel Private Limited {(2019) 15 SCC 529} and would submit that the assessee has failed to discharge the primary onus to establish the genuineness of the transaction, which is required under Section 68 of the Act, 1961. She would further submit that since the said burden has not been discharged, as such the tax liability imposed on the present appellant is justified. She would further submit that no question of law arises for consideration in this case, consequently, the appeal sans merit is liable to be dismissed. 7. We have heard learned counsel for the parties and perused the documents. 8. In order to find out whether the question of law arises for consideration, we went through the orders passed by the ITAT and CIT. The original assessment order was dated 27/12/2016 wherein the income of the company was assessed at Rs. 4,13,41,500/- and accordingly the demand notice of Rs. 1,78,39,640/- was raised. Pursuant to the scr....
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....g is pending, shall not be exercised by any income tax authority below the rank of [Principal Director or Director] or [Principal Commissioner or Commissioner] [, other than the Joint Director or Deputy Director or Assistant Director,] without the prior approval of the Principal Director or Director or, as the case may be, the [Principal Commissioner or Commissioner] : [Provided also that for the purposes of an agreement referred to in Section 90 or Section 90-A, an income tax authority notified under sub-section (2) of Section 131 may exercise all the powers conferred under this section, notwithstanding that no proceedings are pending before it or any other income tax authority.] 68. Cash Credits.- Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year. [Provided that] where the assessee is a company, (not being a company in which the public are su....
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....submitted the documents relating to identity, genuineness of the transaction, and creditworthiness, then the AO must conduct an inquiry, and call for more details before invoking Section 68. If the assessee is not able to provide a satisfactory explanation of the nature and source, of the investments made, it is open to the Revenue to hold that it is the income of the assessee, and there would be no further burden on the Revenue to show that the income is from any particular source. xxx xxx xxx xxx xxx xxx xxx xxx xxx 9.5. The Delhi High Court in CIT v. Oasis Hospitalities (P) Ltd. [CIT v. Oasis Hospitalities (P) Ltd., 2011 SCC OnLine Del 506 : (2011) 333 ITR 119] , held that: (SCC OnLine Del para 43) "43. ... the initial onus is upon the assessee to establish three things necessary to obviate the mischief of Section 68 of the Act. These are: (i) identity of the investors; (ii) their creditworthiness/investments; and (iii) genuineness of the transaction. Only when these three ingredients are established prima facie, the department is required to undertake further exercise...." 11. The submission of the appel....