2019 (10) TMI 1606 - AT - Income Tax

Addition u/s 68 - assessee could not establish the identity creditworthiness and genuineness of the transaction - HELD THAT - As assessee could not furnish the confirmation of the depositor. Therefore the assessee has failed to discharge initial onus cast upon it. Further the order of CIT(A) also noted that assessee itself is an entity which is a penny stock company. Merely because there is an order of the Hon ble High Court of amalgamation the identity creditworthiness and genuineness of the depositors cannot established. No infirmity in the order of the lower authorities. Appeal of the assessee is dismissed.

Summary

The appeal was filed by the assessee against the addition of Rs. 25 lakhs made by the assessing officer under section 68 of the Income Tax Act for the amount invested as share capital in the assessee company by another company. The assessing officer found that the investor company could not be located at the given address and the assessee failed to provide confirmation of the investment. The Commissioner of Income Tax (Appeals) confirmed the addition, noting that the assessee was listed as a penny stock company. The Appellate Tribunal upheld the lower authorities' decision, stating that the assessee did not establish the identity, creditworthiness, and genuineness of the transaction, and therefore confirmed the addition of Rs. 25 lakhs under section 68 of the Act. The appeal of the assessee was dismissed.