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Issues Involved:
The issue in this case involves the genuineness of share capital invested by alleged bogus concerns, leading to additions in the income of the assessee and initiation of penalty proceedings. Judgment Details: 1. AO's Rejection of Assessee's Explanation: The AO did not accept the explanation provided by the assessee regarding the genuineness of the shareholders, despite the submission of affidavits and claims of investment through account payee cheques. The AO relied on a statement by K.C. Hazarika without allowing the assessee to cross-examine him. The assessee, in an attempt to prove good faith, offered to pay tax on the disputed amount, but this offer was not accepted by the AO. 2. CIT(A) Decision and Tribunal's Acceptance: The CIT(A) considered the evidence presented by the assessee regarding the identity, creditworthiness, and genuineness of the contributors to the share capital. The CIT(A) subsequently deleted the addition made by the AO, noting the lack of consideration of evidence by the AO and the failure to provide the assessee with an opportunity to cross-examine K.C. Hazarika. The Tribunal upheld the CIT(A)'s decision. 3. High Court's Finding and Dismissal: The High Court found that the CIT(A) had not erred in accepting the assessee's contention that the AO had disregarded crucial evidence mentioned in the assessee's submissions. The High Court noted that the AO had not properly considered the offer made by the assessee to pay tax on the disputed amount. The Court rejected the Revenue's plea for remand, stating that it would not serve any purpose and would only cause further delay and harassment to the assessee. The Court concluded that no substantial question of law arose and dismissed the appeal. In conclusion, the High Court upheld the decision of the CIT(A) and the Tribunal, finding in favor of the assessee and dismissing the Revenue's appeal.
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