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2015 (10) TMI 2057 - HC - Income TaxAddition under Section 68 - undisclosed share application/capital money received by the Assessee - CIT(A) and ITAT delted the addition - Held that - It is not in dispute that extensive material was produced by the Assessee in the present case to prove the identity, genuineness and creditworthiness of the companies who had subscribed to its shares. Among the materials produced were the Income Tax Returns and the PAN card details of the eight companies. Even if the Directors of these companies did not respond to the summons issued by the AO, it was not impossible for the AO to make proper enquiries to ascertain the genuineness of these entities and satisfy himself of their creditworthiness. As pointed out by the CIT(A), the AO failed to make any effort in that direction. He did not take to the logical end the half-hearted attempt at getting the Directors to appear before him. He did not even seek the assistance of the AOs of the concerned companies whose ITRs and PAN card copies had been produced. The view taken by the CIT(A) that the AO failed to come up with the material to disprove what had been produced by the Assessee is certainly a plausible view in the facts and circumstances of the case. Likewise, the view taken by the ITAT concurring with the CIT(A) on facts cannot be said to be perverse. - Decided in favour of assessee.
Issues:
1. Condoning the delay in re-filing the appeal. 2. Appeal by the Revenue against the order of the ITAT regarding the addition to the Assessee's income under Section 68 of the Act. 3. Validity of reopening the assessment. 4. Discharge of onus to prove the genuineness and creditworthiness of the companies. Analysis: 1. The delay of 149 days in re-filing the appeal was condoned by the Court for reasons stated in the application, leading to the disposal of the application. 2. The appeal by the Revenue was against the ITAT's order regarding the addition of Rs. 60,00,000 made by the AO to the Assessee's income under Section 68 of the Act. The Court was asked to consider whether the ITAT was correct in law in affirming the CIT (A)'s decision to delete the said addition. 3. The assessment for AY 2003-04 was reopened based on information from the Director of Income Tax (Investigation). The AO added Rs. 60 lakhs to the Assessee's income, considering the share application money received from various companies as income. The CIT (A) observed that the AO failed to disprove the extensive documents provided by the Assessee and did not confront the Assessee with the investigation report. The ITAT concurred with the CIT (A)'s findings, noting the AO's failure to take further steps after directors of the companies did not respond to summons. 4. The Assessee provided extensive material to prove the identity, genuineness, and creditworthiness of the companies subscribing to its shares. Despite non-cooperation from the directors of these companies, the AO did not make sufficient efforts to verify the entities' genuineness and creditworthiness. The Court found the CIT (A)'s and ITAT's views plausible, dismissing the appeal by the Revenue as no substantial question of law arose. The decisions cited by the Revenue were deemed not applicable to the present case, and the order of the CIT (A) as confirmed by the ITAT was upheld.
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