Factual Examination Of Dispute Regarding 'Addition' Of Unexplained Cash Credit U/S 68 Of IT Act Is Beyond Scope Of Appeal U/S 260A: Calcutta HC
4 months ago

Factual Examination Of Dispute Regarding 'Addition' Of Unexplained Cash Credit U/S 68 Of IT Act Is Beyond Scope Of Appeal U/S 260A: Calcutta HC

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The Calcutta High Court has held that it cannot indulge in factual examination of the material produced or not produced by an assessee-company to explain the share capital and premium received by it, in an appeal filed under Section 260A of the Income Tax Act. Sivagnanam and Justice Hiranmay Bhattacharyya thus refused to interfere with an ITAT order which deleted additions made by the Assessing Officer towards “unexplained” share capital and share premium of Rs.15,51,00,000/- under Section 68. In the case at hand, the Income Tax Department was aggrieved by ITAT order deleting the addition made by the IO, by allegedly ignoring that the assessee failed to explain its non-existence at its registered address, share capital, reserves and surplus, net worth and turnover so as to justify the share premium charged by it within a short duration of seven months after its incorporation. In this backdrop the High Court observed, “examination of the factual position as sought for cannot be done in an appeal filed under Section 260A of the Income Tax Act and it is the duty of the Assessing Officer to have done such an exercise.” Significantly, the ITAT had recorded that the AO failed to controvert the evidence furnished by the share subscriber companies during the assessment proceedings.

Income Share Itat Share Capital Share Premium  cash  dispute  premium  ao  officer  factual  unexplained  order  regarding  examination  credit  companies  produced  scope  share  high  hc  calcutta  itat  income

History of this topic

S.68 IT Act | Whether Assessee Discharged Burden To Substantiate Identity & Genuineness Of Share Application Money Is 'Question Of Fact', Not Law: Gauhati HC
3 months ago

S.68 IT Act | Whether Assessee Discharged Burden To Substantiate Identity & Genuineness Of Share Application Money Is 'Question Of Fact', Not Law: Gauhati HC

Live Law  

The Gauhati High Court refused to entertain an appeal with respect to genuineness of credit received by an assessee from share application money, holding that the same would require it to venture into factual matrix of the case which is beyond its jurisdiction under Section 260A of the Income Tax Act, 1961. The appeal was preferred by the Revenue, following …

Assessing Officer Not Required To Examine Commercial Expediency Of Transaction When Evaluating Assessee's Explanation U/S 68 Of IT Act: Delhi HC
3 months, 3 weeks ago

Assessing Officer Not Required To Examine Commercial Expediency Of Transaction When Evaluating Assessee's Explanation U/S 68 Of IT Act: Delhi HC

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The Delhi High Court has made it clear that once an assessee offers explanation about nature and source of a credit transaction standing in its books, the burden of proof to show that such explanation is unsatisfactory shifts on the Assessing Officer.A division bench of Justices Vibhu Bakhru and Swarana Kanta Sharma further held that in evaluating the transaction so …

Can't Fault AO's Estimation Of Undisclosed Deposits In Foreign Bank When Assessee Fails To Produce Account Statement: Delhi HC
3 months, 3 weeks ago

Can't Fault AO's Estimation Of Undisclosed Deposits In Foreign Bank When Assessee Fails To Produce Account Statement: Delhi HC

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The Delhi High Court has made it clear that it cannot fault the estimation of an Assessing Officer regarding the quantum of deposits made by an assessee in an undisclosed foreign bank, when the latter himself fails to produce the account statement. We find it difficult to accept that any interference with the estimation of the deposit made in the …

Scrutiny Notice Was Issued In Amalgamating Company's Name Despite Dept Knowing Of Amalgamation: Calcutta HC Declines To Apply S.292B Of Income Tax Act
4 months ago

Scrutiny Notice Was Issued In Amalgamating Company's Name Despite Dept Knowing Of Amalgamation: Calcutta HC Declines To Apply S.292B Of Income Tax Act

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The Calcutta High Court has refused to apply Section 292B of the Income Tax Act, 1961 to a scrutiny notice issued in an amalgamating company's name, despite the Assessing Officer being aware about the company's amalgamation. Sivagnanam and Justice Hiranmay Bhattacharyya noted that “the fact of amalgamation was well within the knowledge of the assessing officer.” It thus dismissed the …

Additions U/s 69C On Account Of Excess Stock Can't Be Based On Third Party Statements Alone Without Any Corroboration: Delhi ITAT
7 months, 2 weeks ago

Additions U/s 69C On Account Of Excess Stock Can't Be Based On Third Party Statements Alone Without Any Corroboration: Delhi ITAT

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The New Delhi ITAT deleted the additions made u/s 69C on account of excess stock found during survey, after finding that those additions were solely based on the statements recorded of third parties, without any corroborative evidence of unaccounted sales. On appeal, the CIT affirmed the action of AO on the grounds that the statement of the Director of the …

AO Can't Make Additions Solely Based On Retracted Statement Of Third-Parties If Assessee Has Claimed Opposite: Chennai ITAT
8 months ago

AO Can't Make Additions Solely Based On Retracted Statement Of Third-Parties If Assessee Has Claimed Opposite: Chennai ITAT

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Referring to the decision of Madars High Court in case of P.V. Going further, the Bench held that the AO cannot make additions solely based on retracted statement of third-parties, if assessee had claimed otherwise. In his statement, R. Sabapathy deposed that cash loans were taken by him to pay for the purchase of immoveable properties at Perambur, which was …

No Addition Is Permitted U/s 68 Without Linking Alleged Entries Of Cash With That Of Material Seized During Course Of Search: Mumbai ITAT
9 months, 2 weeks ago

No Addition Is Permitted U/s 68 Without Linking Alleged Entries Of Cash With That Of Material Seized During Course Of Search: Mumbai ITAT

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On finding that the AO has failed to prove that the seized documents were related to the assessee, the Mumbai ITAT held that the addition made by the AO u/s 68 of the Income Tax Act, without bringing any concrete evidence on record incriminating the assessee is not sustainable, and deserves to be deleted. Section 68 of the Income Tax …

Once Cash Deposits In Bank A/C Of Lender Firm Is Accepted As Coming From Explained Sources, No addition Is Permitted U/s 68 As Unsecured Loan: Delhi ITAT
9 months, 3 weeks ago

Once Cash Deposits In Bank A/C Of Lender Firm Is Accepted As Coming From Explained Sources, No addition Is Permitted U/s 68 As Unsecured Loan: Delhi ITAT

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The Delhi ITAT deleted the addition made u/s 68 being unsecured loan obtained from a firm by the Assessee for further investment in a company on the ground that the identity, creditworthiness, and genuineness of the transaction stands proved. Finding that lender firm's AO did not find anything alarming with regard to cash deposits made in its bank account and …

Investment Made From Share Premium Without Any Noticeable Business Activity, Legitimacy Of Income Not Established: Calcutta High Court
10 months ago

Investment Made From Share Premium Without Any Noticeable Business Activity, Legitimacy Of Income Not Established: Calcutta High Court

Live Law  

The Calcutta High Court has held that the source of investments by those two companies is also the share capital and share premium raised by them while issuing their own shares to other closely held companies, and those companies had no noticeable business activities.The bench of Chief Justice T.S. The Calcutta High Court has held that the source of investments …

AO Can't Draw An Adverse Inference For Mere Non-Response From Directors To Notices: Calcutta High Court
10 months, 1 week ago

AO Can't Draw An Adverse Inference For Mere Non-Response From Directors To Notices: Calcutta High Court

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The Calcutta High Court, while deciding whether the addition made under Section 68 of the Income Tax Act, 1961, was justified or not, held that only because the directors failed to respond to the notices issued, the Assessing Officer could draw an adverse inference.The bench of Chief Justice T.S. The Calcutta High Court, while deciding whether the addition made under …

Assessee Has Not Benefited From Round-Tripping Of Share Transactions; Mumbai ITAT Deletes Addition U/s 68
10 months, 2 weeks ago

Assessee Has Not Benefited From Round-Tripping Of Share Transactions; Mumbai ITAT Deletes Addition U/s 68

Live Law  

On finding that the assessee has issued share application money and subsequently allotted shares which shows that the transactions are genuine and there is no material brought on record by tax authorities that the assessee has benefited from round-tripping, the Mumbai ITAT deleted the addition made u/s 68 of the Income Tax Act, 1961. The Bench of the ITAT comprising …

Assessee's Failure To Establish Genuineness Of Transaction With Cogent And Credible Evidence, Calcutta High Court Upholds Addition
10 months, 3 weeks ago

Assessee's Failure To Establish Genuineness Of Transaction With Cogent And Credible Evidence, Calcutta High Court Upholds Addition

Live Law  

The Calcutta High Court has held that merely proving the identity of the investors does not discharge the onus on the assessee if the capacity or credit worthiness has not been established.The bench of Chief Justice T.S. The Calcutta High Court has held that merely proving the identity of the investors does not discharge the onus on the assessee if …

No Addition U/S 69 Is Permitted Without Examining & Finding Fault In Cash Book Produced By Taxpayer: Delhi ITAT
11 months, 2 weeks ago

No Addition U/S 69 Is Permitted Without Examining & Finding Fault In Cash Book Produced By Taxpayer: Delhi ITAT

Live Law  

On finding that the CIT has failed to examine the cash book presented by the assessee, the New Delhi ITAT deleted the addition sustained by CIT u/s 69 of the Income Tax Act. The Bench of the ITAT comprising of Yogesh Kumar U.S. and N. K. Billaiya observed that “The assessee having been produced the cash book and explained the …

Ahmedabad ITAT Quashes Reopening In Absence Of Tangible Material With AO To Form Reason To Believe Escaped Assessment
1 year ago

Ahmedabad ITAT Quashes Reopening In Absence Of Tangible Material With AO To Form Reason To Believe Escaped Assessment

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The Ahmedabad ITAT quashed reopening proceedings finding that there was no tangible material available with the AO to form a reason to believe that the income of assessee has escaped assessment. The Bench of Waseem Ahmed and Siddhartha Nautiyal observed that “simply that Shri Prakash bhai Ishwar bhai Changela and the assessee are maintaining the bank account in the Social …

AO Must Make Independent Enquiry To Verify Veracity Of Identity, Genuineness & Credit-Worthiness Of Lenders Before Making Addition U/s 68: Kolkata ITAT
1 year ago

AO Must Make Independent Enquiry To Verify Veracity Of Identity, Genuineness & Credit-Worthiness Of Lenders Before Making Addition U/s 68: Kolkata ITAT

Live Law  

Finding that the AO without examining any of the documents, simply made the addition u/s 68 on account of failure of assessee to produce share subscribers, the Kolkata ITAT held that AO cannot take adverse inference without pointing out discrepancies or insufficiency in the evidences and without examining statement of the directors of the subscriber companies. As per the brief …

Sec 68 Can Be Invoked Only If Taxpayer Fails To Explain Amount Found Credited In Its Books: Mumbai ITAT
1 year, 1 month ago

Sec 68 Can Be Invoked Only If Taxpayer Fails To Explain Amount Found Credited In Its Books: Mumbai ITAT

Live Law  

The Mumbai ITAT upheld the CIT's order to delete the addition made u/s 68 of the Income Tax Act, 1961 finding no unexplained cash credit in the books of assessee. The Bench of Pavan Kumar Gadale and Prashant Maharishi observed that, “It is not disputed that the assessee has not received any share application money in the financial year 2011-12 …

Careless Attitude Of AO: Kolkata ITAT Deletes Addition Made Without Examining Nature Of Expenditure
1 year, 1 month ago

Careless Attitude Of AO: Kolkata ITAT Deletes Addition Made Without Examining Nature Of Expenditure

Live Law  

On finding that expenses were incurred for the business purposes during the course of business, for which assessee has submitted all basic details which was not cross verified by the AO, the Kolkata ITAT deleted the addition made by AO. The Member of the ITAT comprising Rajpal Yadav and Girish Agrawal observed that “the inquiry at the end of the …

Additions Can’t Be Made In Absence Of Incriminating Material: ITAT Deletes Income Tax Addition
1 year, 9 months ago

Additions Can’t Be Made In Absence Of Incriminating Material: ITAT Deletes Income Tax Addition

Live Law  

The Mumbai Bench of the Income Tax Appellate Tribunal has held that the additions could not have been made in the absence of any incriminating material.The bench of Kavitha Rajagopal and B.R. Baskaran observed that the additions made by the Assessing Officer under Section 68 of the Act towards the sale of shares and also estimated. The Mumbai Bench of …

AO Can’t Make Addition On The Basis Of Statement Without Corroborating It With Any Other Material: ITAT
1 year, 10 months ago

AO Can’t Make Addition On The Basis Of Statement Without Corroborating It With Any Other Material: ITAT

Live Law  

The Mumbai Bench of the Income Tax Appellate Tribunal has held that an AO cannot make additions merely on the basis of a statement without corroborating it with any other material.The bench of Pavan Kumar Gadale and B.R. Baskaran has observed that the AO has assessed entire cash receipts as income of the assessee without examining the nature of. The …

Impossible For A Company To Get Its Accounts Audited On 31st March And Get The Approval In AGM On The Same Date: ITAT Upholds Addition
2 years, 2 months ago

Impossible For A Company To Get Its Accounts Audited On 31st March And Get The Approval In AGM On The Same Date: ITAT Upholds Addition

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal has held that it is impossible for a company to get its accounts audited on 31st March and present the same for approval in the Annual General Meeting on March 31st.The two-member bench of Kul Bharat and N.K. The Delhi Bench of the Income Tax Appellate Tribunal has held that it …

Failure Of Assessee To Explain Identity And Creditworthiness Of Creditors And Genuineness Of Transaction: ITAT Sustains Addition
2 years, 6 months ago

Failure Of Assessee To Explain Identity And Creditworthiness Of Creditors And Genuineness Of Transaction: ITAT Sustains Addition

Live Law  

The Allahabad Bench of the Income Tax Appellate Tribunal has sustained the addition as the assessee failed to explain the identity and creditworthiness of the creditors and the genuineness of the transaction. The AO made additions to the income of the assessee towards unexplained deposits and cash credits. The assessee filed a second appeal with the tribunal, and the tribunal …

ITAT Upholds Addition On Account Of Manipulation And Rigging Of Shares Via Penny Stock Company
2 years, 8 months ago

ITAT Upholds Addition On Account Of Manipulation And Rigging Of Shares Via Penny Stock Company

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal, consisting of Saktijit Dey, has upheld the addition on the grounds that there was an astronomical increase in the price of the shares due to price manipulation and rigging. The assessee's income tax return was chosen for examination to determine the genuineness of the long-term capital gain offered and claimed exempt …

AO Failed To Consider Genuine Purchases And Sales Entered In The Books Of Account: Himachal Pradesh High Court Deletes Addition
2 years, 9 months ago

AO Failed To Consider Genuine Purchases And Sales Entered In The Books Of Account: Himachal Pradesh High Court Deletes Addition

Live Law  

The Himachal Pradesh High Court bench of Justice Sabina and Justice Satyen Vaidya has deleted the addition on the grounds that the Assessing Officer has failed to consider genuine purchases and sales entered in the books of account. The Assessing Officer had prepared the trading account, the gross profit of the assessee came out against the sales, and, as a …

Onus To Prove Identity, Creditworthiness And Genuineness Of Transaction Lies On Assessee: Pune ITAT
2 years, 9 months ago

Onus To Prove Identity, Creditworthiness And Genuineness Of Transaction Lies On Assessee: Pune ITAT

Live Law  

The Pune Bench of the Income Tax Appellate Tribunal, consisting of Partha Artha Sarathi Chaudhury and Inturi Rama Rao, has ruled that the onus to prove identity, creditworthiness, and genuineness of a transaction lies with the assessee. In the course of assessment proceedings, the assessee furnished affidavits of the shareholders supporting the share capital and copies of bank accounts of …

Non Production Of Persons Despite Summons Leads To Inference Of Routing Own Money : ITAT Delhi
3 years ago

Non Production Of Persons Despite Summons Leads To Inference Of Routing Own Money : ITAT Delhi

Live Law  

The Delhi Bench of ITAT, consisting of members G.S. Pannu and K. Narsimha Chary, has ruled that an Assessing Officer has the power to verify transactions beyond the paperwork submitted by the Assessee under Section 68 of the Income Tax Act, 1961. The Assessing Officer had disallowed expenses and made additions to Assessee's income under Section 68 of Income Tax …

ITAT Upholds CIT(A) Order Confirming Addl Rs. 4.99 Lakh As Unexplained Cash In Muthoot Group MD’s Bank Accounts [Read Order]
7 years, 4 months ago

ITAT Upholds CIT(A) Order Confirming Addl Rs. 4.99 Lakh As Unexplained Cash In Muthoot Group MD’s Bank Accounts [Read Order]

Live Law  

In George Alexander vs The Assistant Commissioner of Income-Tax, the Income Tax Appellate Tribunal has dismissed an appeal filed by the assessee, managing director of the Muthoot Group, against the order of the Commissioner of Income Tax ). However, the CIT rejected the contentions of the assessee and found that the AO, during the course of working out the unaccounted …

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