Is non submission of Transaction and Bank Account Details enough reason to doubt the creditworthiness of a transaction?

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Last updated: 09 June 2021
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The Income Tax Appellate Tribunal ruled on an appeal concerning the addition of share premium as unexplained income. The Assessing Officer had added a significant amount of share premium received by the company, citing the non-submission of transaction and bank account details and questioning the investors' creditworthiness. However, the CIT(A) deleted the addition, finding that the assessee had established the identity, capacity, and creditworthiness of the subscriber, along with the transaction's genuineness, and had provided all necessary documentation. Crucially, the CIT(A) noted that the relevant proviso to Section 68, which was a key point for the Assessing Officer, was introduced after the assessment year in question.

Court :
ITAT Mumbai

Brief :
"On the facts and circumstances of case and in law, the Ld.CIT(A) erred in deleting the addition of Rs.20,90,19,879/- being the amount received on account of Share Premium, without appreciating the fact that assessee, as recorded in the assessment order was unable to prove before the A. O. that the transaction in its books were true, genuine and justified."

Citation :
I.T.A. No. 4314/Mum/2017

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1 Year PLAN
1999
(Excl. of GST ₹359)

2 Years PLAN
3499
(Excl. of GST ₹629)

BEST VALUE
3 Years PLAN
4999
(Excl. of GST ₹899)

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