This document provides an in-depth analysis of ITA No. 1096/DEL/2019, where Garima Commerce P.Ltd faced an addition of Rs.84,00,000 to its income under Section 68 due to alleged discrepancies in share capital transactions.
The case emerged from a scrutiny assessment following a search operation on Priya Gold Group. Documents related to Garima Commerce were seized, questioning the genuineness of share capital amounting to Rs.84,00,000.
The Assessing Officer (AO) noted discrepancies in the transactions linked to share capital, leading to an addition to the income, which the company contested. The CIT(A) upheld the AO’s decision, leading Garima Commerce to appeal to the Income Tax Appellate Tribunal.
The Tribunal reviewed the assessments and appeals, noting the company’s failure to substantiate the source of the funds. The documentation provided did not convincingly demonstrate the identity or financial capacity of the contributors, affirming the addition under Section 68.
This case underscores the importance of transparent and verifiable financial records in corporate transactions. The decision highlights the standards applied by tax authorities in assessing the legitimacy of financial operations involving share capital.
Detailed Case Analysis of ITA No. 1096/DEL/2019: Garima Commerce P.Ltd’s Share Capital Dispute
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