The Income Tax Appellate Tribunal (ITAT), Kolkata Bench deleted the addition of Rs. 50.30 Crores on account of unexplained share application money.
The sole issue raised by the Revenue, is against the deletion of addition of Rs. 50.30 crores made by the AO under section 68 of the Income Tax Act, 1961 on account of unexplained share application money.
The addition of Rs.50,30,00,000 has been made primarily because the AO had held that the shareholders did not respond to summons issued under section 131 of the Act. However, the AO had not taken into consideration the written submission given by the shareholders during assessment proceedings. The affidavits submitted by the shareholders during the appeal proceedings and relevant submissions during assessment proceedings Including remand report, clearly absolves the appellant of non cooperation, as held by the AO in the assessment order passed under section 143(3) of the Act, which was the main plank for the addition of share capital as unexplained cash credit u/s 68 of the Income Tax Act, 1961.
The CIT(A) deleted the addition of Rs.50,30,00,000 under section 68 of the Act on account of unexplained share application money received during the Financial Year 2011-12.
The coram consists of J.S. Reddy and A.T. Varkey noted that there was no sum of money/cash involved in the transaction of allotment of shares to M/s SKJ Coke Industries Ltd.
Therefore the ITAT held that provisions of section 68 of the Act (un- explained cash credit) is not attracted. So, looking from any angle as discussed supra, the addition u/s 68 of Rs. 50.30 crores was not factually or legally sustainable and so in the facts and circumstances as discussed above the addition was not warranted. Therefore, we do not find any infirmity in the order of CIT(A).
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