PRINCIPAL COMMISSIONER OF INCOME TAX Vs. REALVALUE REALTORS

JUDGEMENT

(1.) By this Appeal the Appellant Revenue challenges the order passed by the Income Tax Appellate Tribunal dtd. 30/6/2016. The relevant assessment year is 2007-08. The following questions of law are urged for our consideration :-

(2.) The Respondent - Assessee is engaged in the business of dealing in property and trading in shares and stock. The Assessee filed its return of income declaring the total income as Rs.115778.00. The Assessing Officer, during the assessment proceedings, noted that in the relevant previous year the Respondent had received an amount of Rs.81244700.00 from one Mushtaq Ahmed Vakil as share application money. The Respondent allotted 2421788 shares to Shri Vakil. The Assessing Officer treated the amount shown as a share application money as unexplained cash credit and issued a show cause to the Assessee. The Assessing Officer called upon the Assessee to prove the genuineness of the share transaction by producing necessary evidence. The Assessing Officer held that the Assessee had failed to discharge the onus of establishing genuineness of the transaction and creditworthiness of the shareholder and added an amount of Rs.81244700.00 as income from other sources.

(3.) The Assessee filed an Appeal before the Commissioner of Income Tax (Appeals). The Commissioner called for a remand report from the Assessing Officer. The remand report was submitted by the Assessing Officer. The Commissioner, after going through the remand report, concluded that out of total share application money of Rs.81244700.00 an amount of Rs.51844700.00 was received in the Assessment Year 2006-07 and could not be added in the impugned assessment year. The Commissioner accordingly directed the Assessing Officer to take necessary action if required. In respect of the remaining amount of Rs.2.94 crores, the Commissioner observed that sufficient evidence was produced in respect of the identity and genuineness of the share application money and of Shri Vakil and accordingly deleted the said addition.