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The Income Tax Appellate Tribunal of Delhi pronounced a judgement on 25th October 2022 in the case titled DCIT Vs. Intuitent Online Venture Pvt. Ltd, wherein the revenue had filed an appeal against the Commissioner Income Tax (Appeals) order.
The article discusses the facts, issues and the final judgement produced in the case to provide a better understanding regarding the aspects covered in the case.
If, as per the circumstances and facts in the case, the CIT(A) was correct in law in deleting the additions of Rs.2 crore on account of the disallowance of investment made in the company as Share Capital u/s 68 of the IT Act 1961.
The appellant craved for the permission to add, delete or amend the grounds of appeal prior to or at the time of hearing of the appeal.”
The Hon’ble Judge of the Tribunal observed that the CIT(A), at the time of deleting the addition, had given a categorical finding that during the assessment proceedings assessee had filed various documents pointing out the receipt of the application money, which clearly proved that the money was invested by 2 investors based in Mauritius which are the companies registered under Companies Act and also registered under SEBI (Venture Capital Fund) Regulation 1996 (“SEBI VC REGS”). Another finding of the CIT(A) was regarding the fact that Seedfund International was a trust registered under the SEBI (Venture Capital Fund) Regulation, and it files its ITR in India. He has further given a finding that the identity of the share application cannot be doubted. Also, the creditworthiness was well established, and the AO did not dispute the genuineness of the transaction. The finding of the CIT(A) regarding the failure of the AO in bringing any argument to account the plethora of documentary evidence submitted by the assessee., Revenue has not pointed out any fallacy in the findings of CIT(A), and therefore, the current tribunal did not interfere with the order of Ld. CIT(A) and thus, the Ground of Revenue is dismissed
The judgement clearly provides that till the time the creditworthiness of the investor and the genuineness of the transaction is proved, the AO cannot make any additions as per section 68 of the ITA Act, which was supported by CIT (A) and ITAT Delhi, thereby dismissing the appeal of the revenue that questioned the deletion of the additions made by the AO as per section 68 Act of the Act.
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