The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the assessees have filed the document to prove the identity, creditworthiness and genuineness of the transaction of each shareholder and discharged their burden as requirement under section 68 of the Income Tax Act.
The bench of Sudhir Kumar (Judicial Member) and B. R.R. Kumar (Accountant Member) has observed that the assessees have issued the shares at fair market value computed in accordance with the rules and no error has been found in the method applied by the assessees. The CIT(A) has enhanced the value under section 56(2) of the Income Tax Act purely on the conjecture basis.
The appellant/assessee has e- filed the returns of income, which were processed under section 143 (1). The cases were selected for limited scrutiny under CASS to verify “whether the funds received in the form of share premium are from disclosed sources or not.
A notice with a questionnaire was issued to the assessee company. The AO issued the notice to the assessee for personal deposition of the Directors/Pr. officers. The AO made the addition of the entire share premium and share capital to the income of the assessee company treated as unexplained income under section 68 of the Income Tax Act.
The assessee have preferred appeal before the CIT(A). The CIT(A ) upheld the additions made by AO and enhanced income of the assessee.
The assessee contended that the CIT(A) has committed error by sustaining the addition made under section 68 of the Income Tax Act. The assessees have given the names, addresses and PAN number of the investors and also entries in ROC Website. The assessees have proved that identity of investors, creditworthiness of the investors and genuineness of the transaction as required under section 68 of the Income Tax Act by filing the documents. In support of the contention they have filed the paper books in the appeals. He has submitted that assessees have discharged their onus as required under section 68 of the Income Tax Act, therefore sought for deletion of the addition.
The department contended that requisite original documents to satisfy the ingredients of section 68 of the Act. He has not filed the confirmation of ITR, balance sheet, Bank account etc in some cases. The assessees have failed to discharge the burden under section 68 of the Income Tax Act.
The ITAT stated that settled legal proposition is based on legal maxim ‘Expressio unis est exclusio alterius’, which means if a statute provides for a thing to be done in particular manner, then it has to be done in that manner and in no other and following other course is not permissible.
The tribunal allowed the appeal of the assessee and held that the addition of income made u/s 68 of the Act as well as the enhancement of income under section 56(2)(viib) of the Income Tax Act is liable to be deleted.
Case Title: M/s. Punyah Building Materials Pvt. Ltd. Versus ITO
Case No.: ITA No.81/Del/2021
Date: 05/09/2024
Counsel For Appellant: Rajiv Saxena
Counsel For Respondent: Amit Katoch
