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2019 (8) TMI 102 - AT - Income TaxUnexplained credits u/s 68 - share application money - non production of admissible evidence during the course of assessment proceedings - CIT-A deleted the addition - HELD THAT - For the purpose of bringing home the addition u/s. 68, it is necessary that the onus shifted to the AO is required to be discharged by the AO, as the primary onus had already been discharged by the assessee - besides confirming by way of remand report, the AO in the assessment year 2012-13 in the assessment order had again confirmed that after issuance of notices u/s. 133(6), the share applicants, their confirmations, ITRs etc. were examined/verified and kept on record. Nothing has been brought on record by the AO or by the ld. DR before us which shows that the share applications made were not in accordance with law. Therefore, the addition deleted by the CIT(A) is required to be declared void. In fact, AO is bestowed with ample powers u/s. 133(6) as well as section 142(2) - AO should have exercised all his powers at his ends and should have made enquiries and brought on record some cogent material contradicting the confirmations made in the remand report as well as subsequent assessment order for the assessment year 2012-13. Nothing has been brought on record and therefore, we do not find any perversity or illegality in the order passed by the ld. CIT(A). See FAIR FINVEST LTD 2012 (12) TMI 170 - DELHI HIGH COURT - Decided in favour of assessee.
Issues Involved:
1. Deletion of addition on account of unexplained credits in the form of share application money. Detailed Analysis: 1. Deletion of Addition on Account of Unexplained Credits in the Form of Share Application Money Facts and Proceedings: The case was selected for scrutiny due to significant increases in the share application money and fixed assets of the assessee company. The Assessing Officer (AO) required the assessee to prove the identity, genuineness, and creditworthiness of the share application money amounting to ?1,31,50,000. The assessee provided certain documents, including bank account details, names, addresses, and PAN details of the share applicants but failed to produce their bank accounts and income tax returns. Assessing Officer's Findings: The AO issued notices under section 133(6) to verify the share applicants' details, but the notices were returned unserved. The AO concluded that the share application money was unexplained and added ?1,31,50,000 to the assessee’s income under section 68 of the Income Tax Act. The AO also initiated penalty proceedings for concealment of income. Commissioner's Findings: The Commissioner of Income Tax (Appeals) [CIT(A)] noted that the assessee had provided substantial documents to prove the genuineness of the transactions. During remand proceedings, the AO confirmed that nine out of ten share applicants had responded and confirmed the share applications. The CIT(A) concluded that the assessee had discharged its onus of proof and deleted the addition made by the AO. Revenue's Arguments: The Revenue argued that the CIT(A) had not properly examined the identity and genuineness of the transactions and merely relied on the remand report. The Revenue cited several judicial precedents to support their contention that the deletion of the addition was erroneous. Assessee's Arguments: The assessee contended that it had complied with all legal requirements and provided sufficient evidence to prove the genuineness of the share application money. The assessee highlighted that the AO had confirmed the share applications during the remand proceedings and in the assessment for the subsequent year. Tribunal's Findings: The Tribunal examined whether the assessee had discharged the onus under section 68. It noted that the CIT(A) had relied on multiple factors, including the provision of application forms, bank account details, names, addresses, and PANs of the share applicants. The Tribunal observed that the AO had confirmed the share applications during remand proceedings and in the assessment for the subsequent year. The Tribunal concluded that the assessee had discharged its primary onus, and the AO had not brought any contrary evidence on record. The Tribunal upheld the CIT(A)'s decision to delete the addition, finding no perversity or illegality in the order. Conclusion: The appeal filed by the Revenue was dismissed, and the order of the CIT(A) deleting the addition of ?1,31,50,000 on account of unexplained credits in the form of share application money was upheld. Order Pronounced: The Tribunal pronounced the order in the open court, dismissing the Revenue's appeal.
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