Under s.68, assessee discharges onus with documentary evidence of investor identity, creditworthiness via net worth/scrutiny assessments, and banking genuineness; revenue cannot add based on suspicion or non-appearance absent contrary proof; no double taxation if source taxed in investors' hands. (38 words)

ORDER

Per Rajesh Kumar, AM:

This is an appeal preferred by the Revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 08.08.2024 for the AY 2012-13.

2. At the outset, we note that the appeal of the assessee is barred by limitation by 153 days. At the time of hearing the counsel of the assessee explained the reasons for delay in filing the appeal. The Ld. D.R did not raise any objection in condoning the delay. After hearing the rival contentions and perusing the materials available on record, we find that the delay is for bonafide and genuine reasons and hence, we condone the delay and admit the appeal for adjudication.

3. The only issue raised by the Revenue in the various grounds of appeal is against the order of ld. CIT (A) deleting the addition of ₹27,63,00,000/- as made by the ld. AO u/s 68 of the Income-tax Act, 1961 (the Act) by treating the share capital/ share premium as unexplained cash credit.

4. The facts in brief are that the assessee filed the return of income on 23.09.2013, which was selected for scrutiny through CASS for large share capital/ share premium received by the assessee. The assessment was completed u/s 143(3) of the Act vide order dated 13.03.2015, assessing the total income at ₹27,63,00,680/- by making addition u/s 68 of the Act. The said order was challenged before the ld. CIT (A) who confirmed the addition and the matter travelled to ITAT. The Tribunal set aside the order of the ld. CIT (A) and restored the issue to the file of the ld. AO for deciding the issue afresh after affording reasonable opportunity of hearing to the assessee. In the set aside proceedings, the ld. AO again called for the details qua the share capital/ share premium from assessee which were duly furnished by the assessee before the ld. AO (faceless assessment scheme) on 25.01.2021. The assessee furnished before the ld. AO all the details /evidences, vide written submissions dated 23.02.2021, submitting that the assessee had issued 1,42,62,200/- equity shares of ₹1 each of which 1,40,00,000/- shares were issued to two companies at par and balance 2,62,200/- shares at a premium of ₹999/ per share thereby raising share capital/ share premium from 14 companies the details whereof is extracted by the ld. AO in Para no.6 of the assessment order. The assessee filed before the ld. AO copies of share application letters, share allotment letters , ITR acknowledgements of share applicants, audited accounts, bank statements and source of the applicants along with email id. Thereafter, the ld. AO discussed the details qua these companies in the assessment order and finally, held that these 14 share applicants were not able to prove the creditworthiness of the subscribers and genuineness of the transactions as these companies were having more or less same addresses and were not having any fixed assets or inventories nor were carrying on any business activities beside having very meagre ROI. The ld. AO consequently treated the entire amount of ₹27,63,00,680/- as unexplained cash credit u/s 68 of the Act and added to the income of the assessee in the assessment framed u/s 143(3) read with section 254 read with section 144B of the Act dated 29.09.2021.

5. In the appellate proceedings, the ld. CIT (A) after taking into consideration the submissions of the assessee along with the evidences filed by the assessee allowed the appeal of the assessee by directing the ld. AO to delete the addition by categorizing the investors in the four categories as discussed in the following paras.

5.1. In the first category the ld. CIT (A) deleted the addition made in respect of mone