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Share Application Money can’t be treated as Unexplained If AO doesn’t make any Investigation on document filed

In The ACIT vs M/s. TRN Energy Pvt. Ltd., while dismissing the appeal filed by the revenue Delhi bench of Income Tax Appellate Tribunal (ITAT) has held that the share application money received cannot be treated as unexplained for the purpose of Section 68 of the Income Tax Act, 1961 if the Assessing Officer (AO) doesn’t made any investigation on the documentary evidences at the period of assessment. 

In the instant case the assessee company has filed its return of income for the relevant assessment year declared a loss of Rs.2,75,807. 

During the course of assessment proceedings, the AO noticed that during the year under consideration, the assessee-company has received fresh share application money of Rs.10,63,50,000 from M/s. Jaisri Properties Exports Pvt. Ltd and the assessee was asked to furnish evidence in support of the genuineness of the share application money. In response, the assessee submitted all the supporting documents of the genuineness of the share application received from the Investor Company including name of the party, address, PAN, bank statement etc.

Article referred: http://www.taxscan.in/share-application-money-unexplained-investigation-documentary-evidences-filed-itat/16267/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Taxscan+%28Top+Stories+%E2%80%93+Taxscan+%7C+Simplifying+Tax+Laws%29

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