Invocation of provisions of Section 68 of the Income Tax Act on account of Share Application Money

IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD - BENCH ‘B’
BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT
AND
SHRI WASEEM AHMED, ACCOUNTANT MEMBER

ITA No.213/Ahd/2013

Asstt. Year: 2009-10

ACIT, Cir.5
Ahmedabad.

vs

M/s.Neesa Infrastructure Ltd.
Plot No.278/289
Panchratna Indl. Estate
Opp: Amec Cold Storage
Changodar, Ahmedabad.
PAN : AABCN 7916 N

Date of Hearing : 05/10/2021

Date of Pronouncement: 01/12/2021

O R D E R

The ld.CIT(A)-XI, Ahmedabad has decided appeal of the assessee for the Asstt.Year 2009-10 vide order dated 12.11.2012. Against this order, cross appeals were filed i.e. ITA No.2899/Ahd/2012 (by Assessee) and ITA No.213/Ahd/2013 (by Revenue). Both these appeals were dismissed by the Tribunal for want of prosecution vide order dated 16.8.2017. Thereafter Revenue filed MA bearing No.13/Ahd/2018. It was contended by the Revenue that its appeal cannot be disposed of for want of prosecution because the ld.CIT-DR was present on behalf of the Revenue.

2. Similarly, in response to the notice of hearing in the Revenue’s appeal, none has come present on behalf of the assessee, therefore with the assistance of the ld.DR, we have gone through the record
carefully, and proceeded to decide the appeal ex parte qua the assessee respondent.

3. We have heard the ld.DR and also gone through the material available on record. It is pertinent to note that section 68 of the Income Tax Act contemplates that 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. The case of the assessee was that transaction is genuine and identity
of the person who gave share application money was established, and therefore, provisions of section 68 could not be applicable in the case of the assessee.

4.Brief facts of the case are that during the assessment proceedings the assessee shown sundry creditors, trade creditors and creditors for capital goods and creditors for expenses and others to the tune of Rs.3,48,78,284/-. The ld.AO sought for details in this behalf, viz. party-wise details of sundry creditors outstanding as on 31.3.2007, 31.3.2008 and 31.3.2009 along with their confirmations.
Since the assessee failed to submit details with explanation, and therefore, addition to the extent of Rs.3,48,78,284/- was made to the total income of the assessee. Aggrieved assessee preferred appeal before the first appellate authority. On the basis of certain details submitted by the assessee before the ld.first appellate authority, the ld.CIT(A) called for remand report from the AO. However, the ld.AO was not convinced with the evidence produced before the ld.CIT(A) by the assessee, and he observed that these details did not reflect whether any actual transactions took place or not.

5. In the result, appeal of the Revenue is partly allowed. Order pronounced in the Court on 1st December, 2021 at Ahmedabad.

Please find attached the enclosed file for the full judgement.