S. 68 : Cash credits-Strictures- Share capital and Compulsorily Convertible Debentures-Investment of Rs.55 crores by foreign investor companies incorporated in Mauritius and Cyprus-Assessee furnished investment-cum-collaboration agreement, details of foreign inward remittances, audited financial statements of investor companies and other supporting documents-TPO and FT&TR reports did not contain any adverse finding-CIT(A) and Tribunal recorded concurrent findings that investments were genuine and duly explained-Revenue failed to establish that findings were perverse-An Assessing Officer is required to objectively consider the assessee’s reply, pleas and documents, and ignoring such material amounts to a breach of principles of natural justice and procedural fairness- Addition was deleted-Order of Tribunal affirmed.[S.143(3), 260A.]
The assessee-company had received Rs.55 crores from New Dimension Holdings Ltd., Mauritius and Velford Ventures Ltd., Cyprus towards subscription of shares and CCDs. The Assessing Officer treated the investment as unexplained under section 68, primarily questioning the creditworthiness of the foreign investors. The CIT(A), after examining the investment-cum-collaboration agreement, audited accounts of the investors, foreign inward remittance certificates and other material, found the investments to be genuine and duly explained, which finding was affirmed by the Tribunal. The Delhi High Court held that the concurrent findings were based on material available on record and the Revenue had failed to show them to be perverse. The appeal was accordingly dismissed. The Court further observed that the Assessing Officer had completely ignored the documents and explanations furnished by the assessee; an Assessing Officer is required to objectively consider the assessee’s reply, pleas and documents, and ignoring such material amounts to a breach of principles of natural justice and procedural fairness. (AY. 2011-12) (ITA No. 770/2025 dt. 19-08-2026)
Pr. CIT v. Ansal Phalak Infrastructure Pvt. Ltd. (now known as New Look Builders and Developers Pvt. Ltd. (Delhi)(HC) [www.itatonline.org]
[Coram : Hon’ble Mr. Justice Dinesh Mehta and Hon’ble Mr. Justice Rajneesh Kumar Gupta]