Equal Amount Of Investment In Equity Of Other Entity Was Made Against Credits In Form Of Share Capital & Premium: Kolkata ITAT Justifies Addition U/s 68

The Kolkata ITAT upheld the addition under section 68 of the Income Tax Act, noting that the CIT(A)'s finding merely addressed the absence of cash receipts during the year without delving into the evidence provided by the assessee to explain the alleged sum's nature and source. \r

The company, Mangalvani Commercial Pvt. Ltd., failed to comply with summons under section 131, hindering the examination of the identity and creditworthiness of share subscribers. Despite maintaining books of accounts on a mercantile basis, with no requirement stipulating receipt only through banking channels, the absence of clarification from the assessee warranted the addition. \r

Thus, the ITAT dismissed the CIT(A)'s decision and allowed the Revenue's appeal in the case titled ITO v. Mangalvani Commercial Pvt. Ltd., represented by Kiran Chatrapoty.