TaxTMI 
TaxTMI 
2025 (3) TMI 446
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....ipt of share application money/ premium money. (b) "On the facts and circumstances of the case and in law, whether the learned Ld. CIT(A) was right in holding that the assessee company, based on the limited details submitted before the AO, had discharged its onus to prove the genuineness of the transactions of receipt of share application money/ premium money, without appreciating the fact that the investors were not resident of the India and money had flown from the sources outside." 2. "On the facts and circumstances of the case and in law, whether the learned Ld. CIT(A) was right in holding that the amount of Rs. 4,32,94,944/- was received in the earlier year and as such it was beyond the purview of the section 68 of the I.T. Act 1961, without appreciating the fact that no such claim was made before the AO, during the course of the assessment and the AO had no occasion to examine this issue during assessment proceedings." 3. (a) "On the facts and circumstances of the case and in law, whether the learned Ld. CIT(A) was right in deleting addition of Rs. 2,10,38,677/- under section 68 of the I.T. Act 1961, without appreciating the fact that during the ass....
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....editworthiness of the above-stated share premium received by the assessee. The assessee submitted various details in response to these notices, viz. bank account statements, RBI permission letter for FDI, etc. During the assessment proceedings, the assessee was granted another opportunity to provide specific details with supporting documentary evidence in regard to the identity, genuineness, and creditworthiness of the shareholders from whom the assessee has received share premium during the year. Since, as per the Assessing Officer ("AO"), the assessee did not furnish the requisite evidence to prove the identity, genuineness and creditworthiness of the shareholders, the share premium money amounting to INR 8,53,94,800 was treated as unexplained credits in the accounts of the assessee, and added to its total income under section 68 of the Act. 6. The learned CIT(A), vide impugned order, allowed the ground raised by the assessee on this issue and deleted the addition made under section 68 of the Act by observing that the details/evidence furnished by the assessee prove the identity of the investors, creditworthiness of the investors, and genuineness of the transaction. Being aggr....
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....aforesaid documents furnished by the assessee, which forms part of the paper book, it is evident that the assessee furnished various details to not only prove the identity and creditworthiness of the investor but also the genuineness of the transaction. In this regard, the assessee has also placed on record the certificate issued by the Chartered Accountant certifying the no. of shares issued to Mr. Girish Hiranandani and Mr. Manish Hiranandani, during the year under consideration, and the method of valuation followed while issuing the shares. It is evident from the record that the AO did not consider any of the aforesaid details and made the addition under section 68 of the Act by considering the share application money as unexplained cash credit, by observing as follows: - "3.3 In response to the above stated show cause letter, the assessee has submitted details on the ITBA system on 20/12/2019. The details were perused and it is seen that the assessee has again submitted the same details viz. bank account statements, RBI approval etc. and has not submitted any details in regard to the identity, genuineness and creditworthiness of Sh. Girish Hiranandani and Sh. Manish Hi....
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....at the appellant's claim about the amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably and that the finding that the said amounts are income of the appellant from other sources is not based on evidence." 3.4 therefore, in light of the above stated facts and circumstances, material available on the record and case laws referred the amount of Rs. 8,53,94,800/- received during the year as share premium money from Sh. Girish Hiranandani and Sh. Manish Hiranandani remains unexplained credits into the accounts of the assessee in absence of justifiable documentary evidences regarding the identity genuineness and creditworthiness of these entities. Therefore, the amount of Rs. 8,53,94,800/- is treated as unexplained credits into the account and added back to the total income of the assessee uls. 68 of the IT Act, 1961." 8. However, it is evident from the perusal of the impugned order that the learned CIT(A) has considered all the aforesaid details/documents furnished by the assessee to establish the identity and creditworthiness of the share....
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....d CIT(A), vide impugned order, allowed the ground raised by the assessee on this issue and deleted the addition of INR 2,10,38,677 made under section 68 of the Act. 12. We have considered the submissions of both sides and perused the material available on record. In the present case, there is no dispute regarding the fact that the addition of INR 2,10,38,677 was made by the AO under section 68 of the Act on account of trade payables debited by the assessee in the profit and loss account. Since the assessee could not provide the complete details of the parties to whom the payment is to be made, the AO treated the trade payable amount outstanding in the books of the assessee as unexplained credit and added the same under section 68 of the Act. 13. From a plain reading of the provisions of section 68 of the Act, it is evident that where any sum is found credited in the books of the assessee and the assessee offers no explanation about the nature and source thereof or the expansion offered by him is not in the opinion of the AO satisfactory, then the sum so credited may be chargeable to income tax as the income of the assessee. However, in the present case, it is discernible that....
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....represented purchases made on credits. The provisions of Section 68 of the Act are clearly not attracted to amount representing purchases made on credits, as is also held in 'CIT v. Pancham Dass Jain', 205 CTR 444 (All). The assessee raised this issue by way of written submissions (APB 37 to 160, relevant portion at para-5, on page 43) dated 10.05.2014 filed before the CIT(A). The ld. CIT(A) has, however, not addressed this grievance at all and merely upheld the addition made under Section 68 of the Act. On behalf of the assessee, a comparative chart of net profit rate of the assessee for the assessment years 2005-06 to 2011-2012 has been filed before us. In the earlier years also, no such addition was made. For the assessment year 2007-08, under scrutiny assessment, the assessment was made at 8%. The position remained much the same for the assessment year 2008-09. The year under consideration is assessment year 2009-10. The material supplied to the assessee by the concerned department is part of the assessee's turnover. The net profit rate of the assessee for the year under consideration was in line with the preceding assessment year. Further, the trade creditors in th....