ITAT CHANDIGARH – ACIT,
LUDHIANA VS. A. P. REFINERY PVT. LTD.
ITA NO. 186/CHD/2016
10 FEBRUARY, 2017
Core Fact of the Case:
……..This appeal by revenue has been directed against the order of ld. CIT
(Appeals)-2 Ludhiana dated 18.12.2015 for assessment year 2012-13 on the
following grounds:
1) Whether on the facts and in the circumstances of the case and in law, the Ld.
CIT(A) was right in deleting addition of Rs. 1,75,00,000/- made by the Assessing
Officer u/s 68 of the IT Act on the issue of alleged receipt of share
capital/premium by the assessee.
2) Whether on the facts and in the circumstances of the case and in law, the Ld.
CIT(A) was right in deleting addition of Rs.1,59,00,000/- made by the Assessing
Officer u/s 68 of the I.T. Act on the issue of peak credit in respect of
unsecured loan received by the assessee.
Judgment: ………………………… The assessee has to initially establish the identity of the
shareholder/lender, genuineness of the transaction and credit worthiness of the
shareholder/lender………….. The assessee produced adequate evidences before the
authorities below which would discharge burden on the assessee in proving
identity of the shareholder/lender, genuineness of the transaction and credit
worthiness of the shareholder…………. Therefore, if the Assessing Officer wanted to
disbelieve these evidences and material on record, Assessing Officer should have
brought some adverse material against the assessee on record which Assessing
Officer has failed to do in this case…………. It is well settled law that
additional burden was on the revenue to show that even if the share applicants
did not have the means to make investment, the investment made by them actually
emanated from the coffers of the assessee company so as to enable it to be
treated as undisclosed income of the assessee. A.O. however, failed to do
so………..Considering the facts and circumstances and material on record in the
light of above discussion, we are of the view ld. CIT (Appeals), on proper
appreciation of facts and material on record rightly deleted the addition of Rs.
3.34 Cr on account of investment in share capital/premium and peak credit of
unsecured loans received by the assessee. The disallowance of interest was also
correctly deleted by ld. CIT (Appeals). In the result, departmental appeal fails
and is accordingly dismissed.
Analysis : In the case of JSM also, all required documents were placed before
the Ld. A.O. to prove the identity and existence of the companies. No adverse
material has been mentioned or found by the Ld. A.O.
* As the detailed judgment runs into several pages, it is not printed.
