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ITO vs. Neelkanth Finbuild Ltd (ITAT Delhi)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: April 1, 2015 (Date of pronouncement)
DATE: April 6, 2015 (Date of publication)
AY: 2006-07
FILE: Click here to download the file in pdf format
CITATION:
S. 68: Even if the issue share capital is bogus, no addition can be made in assessee's hands if identity of shareholder is established. Assessee is not required to show source of shareholder's funds

Hon’ble Supreme Court of India in the case of CIT VS. Lovely Export 299 ITR 261 (SC) which has confirmed the order of Hon’ble Delhi High Court has held that once the identity of the share holder have been established, even if there is a case of bogus share capital, it cannot be added in the hands of company unless any adverse evidence is not on record. The documentary evidence filed by the assessee shows that the assessee has provided confirmations from all the parties as well as various evidences to establish the genuineness of the transaction. In Nemi Chand Kothari Vs.
CIT 264 ITR 254 (Gauhati) it was held that it is a certain law that the assessee is to prove the genuineness of transaction as well as the creditworthiness of the creditor must remain confined to the transactions which have taken place between the assessee and the creditor. It is not the business of assessee to find out the source of money of creditors. Similar observation has also been given in the case of Hastimal 49 ITR 273 (Madr) and Daulatram Rawatmal (1973) 87 ITR 349 (SC).

3 comments on “ITO vs. Neelkanth Finbuild Ltd (ITAT Delhi)
  1. very funny to note how come even elementary things these worthy AOs seem do not know!

    whether indian education is really progressing even in government department is a very big question indeed to be answered by revenue!

  2. very funny to note how come even elementary things these worthy AOs seem do not know!

    whether indian education is really progressing even in government department is a very big question indeed to be answered by revenue!

  3. we want even elementary things the honourable courts need to help to these great revenue men! great progress in economic and education development.

    i wonder how Modiji as PM told CJI to have self checking mechanism in judiciary, while in fact, self checking mechanism is terribly missing in very finance ministry of govt of india…great economic perceptional development!

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