Pr. Commissioner Of Income Tax-4 v. Gazipur Properties Pvt! Ltd

$-45 *IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 883/2016 PR. COMMISSIONER OF INCOME TAX-4 Appellant , Through : Sh. Zoheb Hossain, Sr. StandingCounsel with Sh. Akshay Saxena and Sh. DeepakAnand, Advocates. versus ' GAZIPUR PROPERTIES PVT! LTD. Through: None. CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE NAJMIWAZIRI ...„ Respondent ORDER%07.12.2016 In the appeal under Section 260A of the Income Tax Act, 1961[hereafter "the Act"], the revenue is aggrieved by the order of theIncome Tax Appellate Tribunal (ITAT) which confirmed the decisionof the CIT (Appeals) on the question of addition under Section 68 ofthe Act. ; During the relevant period, i.e. AY 2006-07, the assessee hadinter «//« claimed in its returns that it received large sums of moneyfrom third parties on account of capital issue. The Assessing Officer(AO) doubted the genuineness of the source of funds, added these andbrought them to tax. In the appellate proceedirigs, CIT(A), based uponadditional materials, furnished during the course of the proceedings,sought a remand report. In the remand proceedings, the AO called theshare applicants and also sought details and particulars. The share Signature Not Verified applicants complied to the communication, and provided details , ofPAN numbers, filed copies of the income tax returns along withbalance sheets, profit and loss accounts, bank statements and otherrelevant materials. The remand report concluded that the shareapplicants, after furnishing these particulars did not choose to appearfurther. These materials were categorically considered by the CIT(A)who noted that the identity of the share applicants and of the financialparticulars, PAN numbers. It returns, names of banks, the channelthrough which the funds were spent in respect of the share applicants,profit and loss accounts, balance sheets, bank statements of fourapplicants during the relevant period showing the relevanttransactions etc. had been disclosed. The CIT(A), therefore, held thatthe assessee had discharged the burden of proving three-prongedrequirements under Section 68 of the Act, i.e. identity of the shareapplicants, genuineness of the transaction and creditworthiness of theinvestor. So concluding, the CIT(A) allowed the appeal. This orderwas confirmed by the ITAT. It is urged on behalf of the revenue that the CIT(A) ignored, and overlooked the incriminating statements made by theaccommodation entry providers, who had clearly stated that the sumsof money reached through bogus entries and that in reality, theamounts had to be added under Section 68. It was submitted thatabsence of the share applicants after a point of time led to- theinference that there was no genuineness as to the transaction. This Court is of the opinion the the requirements of Section 68as spelt out in CIT v. Lovely Exports Pvt. Ltd. 2008 (299) ITR 268 //// (SC) have been complied with. The assessee did all, that it was/required to do - provide the identity of the shareholders, the financialsrelating to . transactions as well as the materials to establishcfeditworthiness of the third parties. This Court also notices that theshare applicants had contended that the amounts were received bythem on account of transfer of their assets at the relevant time. In these circumstances, having regard to the law , that the 'assessee is not required to prove source of the source but ratheronly discharge the, initial burden placed on it under Section 68, wefind no infirmity with the impugned order, No substantial question oflaw arises. The appeal is accordingly dismissed. S.RAVINDRABHAT, J DECEMBER 07,2016ajk NAJm WAZIRI, J