| Recent Judicial Pronouncement
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| CIT v. KAMDHENU STEEL & ALLOYS LTD., SLP (CC) no. 15640 of 2012, dated 17-09-2012 (Supreme Court)
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| Issue Involved: “Whether once the assessee has discharged the initial burden by filing adequate evidence/material, Revenue is supposed to dislodge the initial burden discharged by the assessee and to throw the ball again in the assessee’s court demanding the assessee to give some more proofs, as the documents produced earlier by the assessee either become suspect or are rendered insufficient in view of the material produced by the Department rebutting the assessee’s documentary evidence?†|
| Decided in Favour of: Assessee |
| Held: The Hon’ble Supreme Court has dismissed the Special Leave Petition filed by the Revenue against the decision of Hon’ble Delhi High Court in the case CIT v. Kamdhenu Steel & Alloys Ltd. in which it has been held by Hon’ble Court that once adequate evidence/material given by the assessee, which would prima facie discharge the burden of the assessee in proving the identity of shareholders, genuineness of the transaction and creditworthiness of the shareholders, thereafter, in case such evidence is to be discarded or it is proved that the assessee has “created†evidence, the Revenue is supposed to make thorough probe before it could nail the assessee and fasten the assessee with such a liability under Section 68 and 69 of the Act. |
| The Assessing Officer ought to have carried his suspicion to a logical conclusion by further investigation. For the only reason that creditors / share applicants could not be found at the address given by the assessee it would not give a right to Revenue to invoke the provisions of section 68 without any additional evidence to support such a move of the revenue. Therefore, addition made is rightly deleted.
In holding so Hon’ble High Court followed the decision of CIT vs. Lovely Exports (P) Ltd.: (2008) 216 ITR 195 (SC) and relied on CIT vs. Oasis Hospitalities Pvt. Ltd.: (2011) 333 ITR 119 (Del), CIT vs. Divine Leasing & Finance Ltd. (2007) 299 ITR 268 (Del) and CIT vs. Dwarkadish Investment (P) Ltd. (2010) 45 DTR 281 (Del). |
| DOON EDUCATIONAL TRUST SOCIETY V. CIT, ITA no.2540/D/2012, dated 31-08-2012 (ITAT Delhi)
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| Issue Involved: “Whether if a commercial activity carried on incidentally by a charitable society, the first proviso to section 2(15) would be applicable or not in case of imparting education and; Whether while granting registration under section 12AA read with section 12A of the Income Tax Act, 1961 the concerned CIT is required to satisfy himself about the objects of the trust and genuineness of its activities only or he can go further?†|
| Decided in Favour of: Assessee |
| Held: It has been held by Hon’ble Delhi ITAT that if any commercial activity is carried on incidentally by a charitable society, the first proviso to section 2(15) would not apply in case of imparting education. |
| It has also been held that at the time of granting registration, the CIT is only required to satisfy himself about the objects of the trust and genuineness of the activities and has not to go further. The CIT has gone beyond his jurisdiction conferred for grant of registration by refusing grant of registration to the assessee society without making any adverse comments about either the object or the activities of the assessee society. |