Case No: ITA 5527/DEL/2019
Appellant: Income Tax Officer, Ward-13(3), New Delhi
Respondent: Jingle Bells Aluminium Pvt. Ltd., New Delhi
Assessment Year: 2012-13
Filed on: 24th June 2019
Final Tribunal Order: 18th March 2021
The case at hand involves the scrutiny assessment carried out by the Income Tax Officer (ITO), Ward-13(3), New Delhi, against Jingle Bells Aluminium Pvt. Ltd. for the assessment year 2012-13. The primary issue under contention is the addition of Rs. 62 crores made under Section 68 of the Income Tax Act, 1961, concerning share capital and share premium received by the company.
The ITO, during the assessment proceedings, observed that Jingle Bells Aluminium Pvt. Ltd. had received share capital and share premium amounting to Rs. 62 crores. The ITO issued notices under Section 133(6) to verify the identity, creditworthiness, and genuineness of the transactions. However, the responses were deemed insufficient, and the ITO concluded that the transactions were not genuine and represented merely accommodation entries. Consequently, an addition of Rs. 62 crores was made to the income of Jingle Bells Aluminium Pvt. Ltd. under Section 68.
Appellant’s Contention:
Respondent’s Defense:
The Tribunal examined the evidence and submissions from both sides. It was noted that while the respondent had provided the necessary documents, the ITO had not conducted sufficient verification to establish that the transactions were bogus. The Tribunal also considered the fact that the investor companies were assessed to tax and had substantial reserves to justify their investments.
Final Judgment:
In the final judgment pronounced on 18th March 2021, the Tribunal concluded that the addition of Rs. 62 crores under Section 68 was not justified. The Tribunal held that the respondent had discharged its onus by providing adequate evidence of the identity, creditworthiness, and genuineness of the transactions. Consequently, the addition made by the ITO was deleted.
This case highlights the importance of thorough verification and the need for assessing officers to provide concrete evidence when making additions under Section 68 of the Income Tax Act. The Tribunal’s decision reinforces that the mere absence of certain documents or discrepancies in responses does not automatically render a transaction as bogus, especially when substantial evidence supports its genuineness.
Note: This summary is intended for informational purposes and does not constitute legal advice.
ITO Ward – 13(3), New Delhi vs Jingle Bells Aluminium Pvt. Ltd., New Delhi – Assessment Year 2012-13
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