M/s. Sapphire Fintech Private Limited v/s Deputy Commissioner of Income Tax

Parties Involved

Facts Summary

The assessee, M/s. Sapphire Fintech Private Limited, is engaged in the business of investment. For the assessment year 2012-13, the assessee filed its return of income declaring a total loss. During the scrutiny assessment, it was observed that the assessee received share capital and share premium amounting to Rs.1,21,00,000/-. The Assessing Officer (AO) issued notices to the share applicants under section 133(6) of the Income Tax Act, 1961, but many notices were returned unserved or went unanswered. The AO held that the assessee failed to establish the identity and creditworthiness of the share applicants and the genuineness of the transaction, leading to the addition of the share application money under section 68 of the Act. The Commissioner of Income Tax (Appeals) upheld this addition, and the assessee filed an appeal before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Addition of Rs.1,21,00,000/- under section 68 of the Act for share application money received by the assessee.
• 2. Addition of 5% as commission on the transaction under section 69C of the Act.
• 3. Disallowance of Rs.4,39,494/- under section 14A of the Act.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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