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Revenue Department has claimed that though the Ld. Commissionerhas held that creditworthiness/capacity of the investing entities is doubtful, however, ultimately wrongly deleted the addition by relying upon the proviso 1 of Section 68. Further, the learned Commissioner wrongly held that listed public companies are excluded from the onus of explaining the source of source without appreciating the law that such exemption is provided only for seeking share capital from the public at large. The Revenue Department further claimed that theLd.Commissioner has erred in law and facts by relying on proviso 1 of Section 68 of the Act without appreciating the explanatory notes of the above noted proviso, which only provides that the onus is different in cases of companies seeking share capital from the public at large and which is not the case in the instant appeal. Further, the learned Commissioner has erred in facts and law in passing the contradictory order on one hand holding that the creditworthiness and the genuineness of the transaction is doubtful but at the same time allowed the appeal of the assessee by incorrectly referring to proviso 1 of Section 68, therefore, on the basis of aforesaid contentions the order under challenge is liable to be set aside. On the contrary, the assessee claimed that theLd.Commissioner has held that the share capital was raised in F.Y. 2008-09 but not in F.Y. 2009- 10 and therefore, the addition cannot be made in the year under consideration i.e. A.Y. 2010-11 and consequently the Ld. Commissioner rightly deleted the addition . The Assessee further claimed that even otherwise in this case the addition was made on the basis of balance sheet available on record with the Assessing Officer and thus not emanating from any incriminating material found during the course of search, as it clearly reflects from the assessment order and, therefore, in the absence of any incriminating material, no addition can be made by passing an assessment order u/s 153A/143(3) of the Act, in view of the decision of Delhi High Court in the case of CIT Vs. Kabul Chawla (2016) 380 ITR 573 (Del.).
Heard the parties and perused the material available on record. The addition of Rs. 2,04,90,000/-was made by the Assessing Officer on account of increase in share capital by passing an assessment order u/s 153A/143(3) of the Act. The said addition was deleted by the learned Commissioner by referring section 68 read with proviso 1 of the Act, whereby the entities which are listed as public companies, are excluded from the onus of explaining the source of source.