TaxTMI 
TaxTMI 
2026 (9) TMI 1699
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....on 30.03.2014, declaring total income of INR 2,22,54,590/-. The case of the assessee was taken up for scrutiny and assessment was completed in terms of order passed u/s 143(3) dated 23.03.2016 wherein various additions / disallowances were made including the addition on account of share capital and premium totaling to INR 3.25 crores held as unexplained credit u/s 68 of the Act. 3. Against the said order, the assessee preferred appeal who vide impugned order dated 28.11.2025, had partly allowed the appeal of the assessee and deleted various disallowances however, has confirmed the addition of INR 3.25 crores made u/s 68 of the Act towards the share capital received during the year under appeal. 4. Aggrieved by the order of ld. CIT(A), the assessee is in appeal before the Tribunal by taking following Grounds of appeal: 1) "On the facts and circumstances of the case and in law, the instant assessment order is bad in law and void-ab-initio. 2) On the facts and circumstances of the case and in law, the Ld.AO and the Ld. CIT(A) erred in making an addition of Rs. 3,25,00,000 on account of share application money received alleging the same as unexplained cash credi....
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....the transactions by filing all the details and even prove the source of source in the hands of the investors, the burden shifted on the AO to controvert the details filed by the assessee. As per ld.AR, when the assessee has established the "source of source" i.e. funds in the hands of the investors, no addition should have been made u/s 68 of eh Act towards the investment made by such investors. Ld.AR submits AO has failed to make any independent enquiry or investigation by issue of summons u/s 133A / 131 of the Act, which was not done. Further the AO has not made any direct inquiries and simply proceeded on the assumptions and presumptions to hold the investment as unexplained credits u/s 68 of the Act. For this reliance is placed on the judgement of Hon'ble Apex Court in the case of CIT vs Orissa Corporation P. Ltd. reported in 159 ITR 78 (SC). With respect to the issue of discharge the onus casted upon the assessee u/s 68 of the Act, reliance is placed on the following judgements:- [i] HiTech Residency (P.) Ltd. [2018] 96 taxmann.com 402 (Delhi) [ii] CIT vs Dwarkadish Investment (P.) Ltd. 194 Taxman 43 (Del); and [iii] CIT vs Lovely Exports Pvt.Ltd. [2....
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....following documents were submitted before the lower authorities:- S No. Particulars Paper Book Page No. 1. Copy of Form 2 filed with ROC for share allotment alongwith valuation thereof 105-110 For M/s R.K.G Enterprises Pvt. Ltd.(NBFC) 2. Confirmation of account 111 3. Copy of Ledger Account 112 4. Bank statement of share applicant 113-116 5. Return of income of share applicant for AY 2013-14 along with Computation of Income 117-119 6. Certificate of registration of NBFC issued by RBI 120 7. Copy of Audited Financial Statement for AY 2013- 14 121-138 For M/s Associated Road Carriers Ltd. (source of For M/s R.K.G Enterprises Pvt. Ltd.) 8. Copy of Return of Income 159 9. Confirmation of account balance of Associated Road Carriers Ltd. 160 10. Annual Report of Associated Road Carriers Ltd. for AY 2013-14 166-205 11. Latest audited financial statement 206-258 For M/s Cross Road Infra Projects Pvt. Ltd. 12. Confirmation of account 259 13. Copy of ledger account 260 14. Copy of ITR V 261 ....
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....rriers Ltd. was also placed at pages 161 to 165 of the Paper Book which shows that the company has sufficient balances. Further, from the perusal of the financial statements of M/s. ARC Road Carriers Ltd., it is observed that it had share capital and reserves of INR 280.50 crores and turnover in the year under appeal was INR 10690.72 crores having net profit of INR 66.87 crores. A copy of ITR is also placed at page 159 of the Paper Book wherein total income of INR 68.06 crores were declared by ARC. 10.3. All these facts clearly established that M/s. R.K.G Enterprises Pvt. Ltd. has discharged the burden of proving the "source of source" in its hands as M/s. ARC Road Carriers Ltd. has having sufficient net worth to repay the loan to M/s. R.K.G Enterprises Pvt. Ltd. In view of these facts, we are of the considered opinion that the share application received from M/s. R.K.G Enterprises Pvt. Ltd. cannot be held as unexplained credit. We order accordingly. [2] Cross Road Infra Projects Ltd. 11. This company has invested a sum of INR 50.00 Lakhs during the year in the share capital of the assessee company. It was the claim of the assessee that the said company had liquidated its ....
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....wer of the assessing authorities to levy assessment on the basis of best judgment. Therefore, the Tribunal was clearly in error in confirming the decision of the Asstt. Collector. Hence, the High Court was justified in interfering with the order of the Tribunal." 13. The Hon'ble Delhi High Court in the case of HiTech Residency (P.) Ltd. reported in [2018] 96 taxmann.com 402 (Delhi) had held that where the assessee has discharged its onus of establishing the identity and creditworthiness of the investors and genuineness of the transactions to whom shares were allotted, no addition could be made u/s 68 of the Act. It is relevant to state that aforesaid order of Hon'ble Delhi High Court was confirmed by Hon'ble Supreme Court by dismissing the SLP filed by the Revenue as reported in [2018] 96 taxmann.com 403 (SC). 13.1 Regarding the judgment relied upon by the Revenue of the hon'ble Apex court in the case of NRI Iron & Steel, the facts of that case are distinguishable as in that case, the assessee failed to file any evidences to establish the genuineness and creditworthiness of the investors/lenders however, in the instant case, as observed above, all the details have been filed ....