SATHIYAM TELEVISION LIMITED, CHENNAI V. ITO, NON CORP WARD-20(5), CHENNAI

ITA 1014/CHNY/2022

AI Insights

The case involves Sathiyam Television Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) sustaining the addition of Rs. 8 Lakhs as unexplained credit under section 68 of the Income Tax Act, 1961. The addition was initially made by the Income Tax Officer during the scrutiny assessment for the Assessment Year 2015-16, questioning the source of share capital received from four investors. The Tribunal examined the evidence provided, including bank statements and tax return acknowledgments, and concluded that the investments were legitimate and the investors were creditworthy, thus allowing the appeal and deleting the addition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135073 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 06-03-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 29-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Bogus
• Section: 68; 143(3)

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी/एस एम सी’’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C/SMC’ BENCH: CHENNAI ी महावीर सह, उपा य के सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND आयकर अपील सं./ITA No.1014/Chny/2022 िनधा रण वष /Assessment Year: 2015-16 Sathiyam Television Ltd., No.1, Kamaraj Park Street, Kalmandapam, Royapuram, Chennai – 600 013. Vs. The Income Tax Officer, Non Corporate Ward-20(5), Chennai. [PAN: AANCS-1034-Q] ( अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : Shri N. Arjunraj, C.A for Shri S. Sridhar, Advocate यथ क ओर से /Respondent by : Shri S. Chandrasekaran, JCIT सुनवाई क तारीख/Date of Hearing : 07.03.2023 घोषणा क तारीख /Date of Pronouncement : 07.03.2023 आदेश / O R D E R This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [CIT(A)] in Appeal No.CIT(A), Chennai- 14/10076/2017-18. The Assessment was framed by Income Tax Officer, Non Corporate Ward-20(5), Chennai for the relevant A.Y. 2015-16 vide order dated 31.10.2017 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’). ITA No.1014/Chny/2022 :- 2 -: 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) sustaining the addition made by A.O as unexplained credit u/s. 68 of the Act amounting to Rs. 8 Lakhs. For this, the assessee has raised grounds which are argumentative in nature and hence, need not to be reproduced. 3. I have heard the rival contentions and gone through the facts and circumstances of the case. I noticed that the A.O during the course of scrutiny assessment proceedings noticed that the assessee being a public limited company increased its share capital during the year to the extent of Rs. 17 Lakhs in the paid up share capital. The A.O after considering the explanation of the assessee made addition of share capital received from Shri P. Amalraj amounting to Rs. 1 Lakh, Ms. V.Anjala amounting to Rs. 5 Lakhs, Shri Sudheer amounting to Rs.1 Lakh and Shri Melvin Robert amounting to Rs. 1 Lakh. According to A.O, the above share capital received of Rs. 8 Lakhs from four investors is unexplained and accordingly, added u/s. 68 of the Act. Aggrieved, the assessee preferred appeal before the CIT(A). The CIT(A) also confirmed the action of the AO, despite various submissions were filed before him. ITA No.1014/Chny/2022 :- 3 -: 4. I have gone through the case records and submissions made by both the sides. I noted that Shri P. Amalraj invested a sum of Rs. 1 Lakh and amount received by the assessee-company vide bearing Cheque No.642714 for amount of Rs. 1 Lakh and this has debited from the bank account of Shri P. Amalraj and he has submitted copy of acknowledgement for filing of return of income along with the details of bank account. Even, the narration of the bank statement of the assessee-company, the payment is received by the assessee- company is clearly debited. Hence, I find no reason to treat this as bogus or unexplained cash credit. 5. Coming to the share application money received from Ms. V. Anjala, who is the owner of proprietary concern M/s. VSP Enterprises and she has invested a sum of Rs. 5 Lakhs vide account payee Cheque No.14134828809 dated 14.05.2014 and the same is reflected in the bank statement of the assessee and the investor. The assessee filed bank statement, computation of income and the acknowledgment for filing of tax returns by the investor. From the bank statements of the assessee-company, it is reflected that the transaction is clearly debited and hence, there is no question of not accepting investors’ creditworthiness. Hence, I treat this as explained and delete the addition. ITA No.1014/Chny/2022 :- 4 -: 6. Coming to the next investment in the name of Shri Sudheer, who invested a sum of Rs. 25,000/- on 02.01.2014 and Rs. 75,000/- on 09.06.2014 in the assessee-company and these transactions were duly reflected in the assessee’s bank statement and he has filed acknowledgment of filing of return of income and he has source of income. The assessee has also provided copy of bank account, the assessee-company reflecting this transaction in both the years. Hence, I find that the source is explained and hence, this addition is to be deleted. I delete the addition accordingly. 7. Coming to Mr. Melvin Robert, the assessee filed bank statement, acknowledgment of return of income of the investor and also provided bank account of the assessee-company reflected the transaction. The investor is assessed to tax is a substantial income declared in the return of income and hence, this investment of share application is also deleted. 8. As regards to the creditworthiness of all the creditors is proved, I delete the addition made by A.O on account of unexplained cash credit of Rs. 8 Lakhs. Hence, the appeal of the assessee is allowed. ITA No.1014/Chny/2022 :- 5 -: 9. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 07 th of March, 2023. Sd/- (महावीर िसंह) (Mahavir Singh) उपा / Vice President चे ई/Chennai, दनांक/Dated: 07-03-2023 EDN/- आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकर आयु /CIT 4. िवभागीय ितिनिध/DR 5. गाड फाईल/GF