June 2019

GLIMPSES OF SUPREME COURT RULINGS

KISHOR KARIA | Chartered Accountant
ATUL JASANI | Advocate

5. Pr. CIT vs. NRA Iron and Steel Pvt. Ltd. (2019) 412 ITR 161 (SC)

 

Cash credits Where sums of money are credited as share capital / premium: (1) The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors and credit-worthiness of the investors who should have the financial capacity to make the investment in question to the satisfaction of the AO, so as to discharge the primary onus; (2) The assessing officer is duty-bound to investigate the credit-worthiness of the creditor / subscriber, verify the identity of the subscribers and ascertain whether the transaction is genuine, or whether these are bogus entries of name-lenders, and (3) If the inquiries and investigations reveal that the identity of the creditors is dubious or doubtful, or they lack credit-worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated by section 68 of the Act.

 

  • The assessee had filed the original return of income for the assessment year 2009-10 on 29.09.2009 declaring a total income of Rs. 7,01,870.
  •  A notice was issued u/s. 148 of the Act to re-open the assessment on 13.04.2012 for the reasons recorded therein.
  • The assessee filed submissions on 23.04.2012 to the notice u/s. 148, and objections on 30.04.2012. The objections were rejected on 13.08.2012.
  • The assessee company in its return showed that money aggregating to Rs. 17,60,00,000 had been received through share capital / premium during the financial year 2009-10 from companies located in Mumbai, Kolkata, and Guwahati. The shares had a face value of Rs. 10 and were subscribed by the investor companies at a premium of Rs. 190 per share.
  • The assessee was called upon to furnish details of the amounts received and provide evidence to establish the identity of the investor companies, the credit-worthiness of the subscribers and the genuineness of

    --->

Past Issues

Flip-Book
HTML View
Current Issue