Assessee is obligated to prove the source of share application money only from AY 2013-14 onwards

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI

BEFORE HON’BLE SHRI C.N. PRASAD, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM (Hearing Through Video Conferencing Mode)

I.T.A. No.7308/Mum/2019

Adhoi Vyapar Pvt. Ltd. A-502, 234, Manish Garden CHS, 4 Bunglow, Andheri(W), Mumbai-400 058

vs

ITO-9(1)(1), R.No. 205, 2nd floor, Aaykar Bhavan, M.K.Road Mumbai-400 020

Assessee by: Shri Ajay Singh, Ld. AR
Revenue by : Shri Brajendra Kumar– Ld. Sr. DR

Date of Hearing: 03/09/2021

Date of Pronouncement: 01/10/2021

O R D E R

We have carefully heard the rival submissions and perused relevant material on record. We have also deliberated upon various judicial pronouncements as cited during the course of hearing. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs.

2. During the course of re-assessment proceedings, notice u/s 142(1) was issued to the assessee calling for requisite details of the share- applicants along with documentary evidences. The assessee, vide reply dated 23/12/2015, provided the details of share-applicants along with their respective addresses and the amount received from each of them during the year. It was also submitted that this was the first year of the assessee company. Vide another reply dated 18/01/2016, the assessee furnished documentary evidences in the form of Share Application Form, PAN Card, confirmation from share applicants regarding investment, relevant pages of bank passbook / statement, Income Tax Acknowledgement for the year, Statement of Income, Profit & Loss A/c & Balance Sheet as on 31/03/2009 and letter of allotment with respect to non-corporate share applicants whereas in case of corporate share applicants, in addition, the copies of Board Resolution, Memorandum and Articles of Association was also furnished.

3. The Ld. DR has cited the decision of Hon’ble Delhi High Court in Nova Promoters & Finlease Pvt. Ltd. (18 Taxmann.com 217) which is factually distinguishable since in that case, the investors made an admission that they were accommodation entry providers. No such admission has been made by the investors in the present case. The case law of Hon’ble High Court of Bombay in Royal Rich Developers (I) Ltd. V/s Pr. CIT (108 Taxmann.com 382) is a case where the investor failed to supply necessary details and documents to establish the genuineness of the investment.

4. All the appeals stand allowed in terms of our above order. Order pronounced on 1st October, 2021.

Please find attached the enclosed file for the full judgement