ACE Cabs Limited vs. ACIT, Circle 1 (2)

Parties Involved

Facts Summary

ACE Cabs Limited, an assessee engaged in car rental services, filed an appeal against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2017-18. The assessee had issued and allotted equity shares and Compulsory Convertible Preference Shares (CCPS) to Click Cab Technology LLP. The Assessing Officer (AO) treated the investment of Rs. 99,99,000 by Click Cab Technology LLP in 1818 CCPS shares as unexplained share capital under Section 68 of the Income Tax Act. The assessee submitted additional evidence to justify the creditworthiness of the investor and the genuineness of the transaction. The Commissioner of Income Tax (Appeals) confirmed the addition without specifying additional information required from the assessee. The assessee argued that the lower authorities did not give them a reasonable opportunity to be heard regarding the identity and creditworthiness of the investor and the genuineness of the transaction.…

Legal Issues

• 1. Whether the addition of Rs. 99,99,000 made u/s 68 of I.T. Act towards share subscription money received by the appellant for issuing Compulsory Convertible Preference Shares (CCPS) to M/s. Clickcab Technology LLP is justified?
• 2. Whether the assessee has discharged the onus of proving the identity, genuineness, and creditworthiness of the investor under Section 68 of the Act?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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