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2022 (11) TMI 1252 - AT - Income TaxAddition on account of share application money by invoking the provision u/s 68 - HELD THAT - The appellant undoubtedly has failed in course of assessment and appellate proceedings to establish the identity and creditworthiness of the so-called share applicants and genuineness of transactions. AO has rightly invoked the provisions of the section 68 to make addition on account of share application money and added it back to the total income of the appellant. Thus, hold that the action of the AO in making addition on account of share application money is justified and therefore the addition u/s 68 made by the AO is confirmed. Appeal of the assessee is dismissed.
Issues:
Appeal against addition of Rs. 84,00,000/- made under section 68 of the Income Tax Act on account of share application money for Assessment Year 2009-10. Analysis: The appeal was filed by the assessee against the order dated 31.12.2018 passed by the Commissioner of Income Tax (Appeals)-24, New Delhi. The case involved the addition of Rs. 84,00,000/- on account of share application money under section 68 of the Income Tax Act. The assessee, a company, had originally filed its return of income for A.Y. 2009-10 on 28.03.2010 declaring total income at Rs. Nil. The case was selected for scrutiny under section 147 of the Act, and a search and seizure operation in the case of Priya Gold Group revealed substantial documents related to the assessee. Consequently, assessment proceedings were initiated under section 153C of the Act, and the total income was determined at Rs. 84,00,000/- by the Assessing Officer. The CIT(A) upheld the AO's order, leading to the current appeal. The Tribunal noted the absence of the assessee during the proceedings, indicating a negligent approach. Despite multiple opportunities, the assessee failed to cooperate, leading the Tribunal to proceed with the appeal based on available records and the arguments presented by the Revenue. The issue revolved around the addition of Rs. 84,00,000/- on account of share application money under section 68 of the Act. The CIT(A) upheld the addition after considering the material on record, including the AO's findings and the appellant's submissions. The AO conducted inquiries, issued notices, and summoned parties related to the share application money, but the appellant failed to provide satisfactory explanations or documentary evidence to prove the genuineness of the transactions. The CIT(A) emphasized the appellant's failure to establish the identity and creditworthiness of the share applicants and the genuineness of the transactions. Referring to section 68 of the Act, the CIT(A) stated that the onus was on the appellant to prove the genuineness of the sum credited in its books of accounts. Despite citing case laws, the appellant's self-proclamation as a shell company affected the applicability of those cases. Consequently, the CIT(A) confirmed the AO's addition of Rs. 84,00,000/- on account of share application money. The Tribunal, after reviewing the CIT(A)'s findings and the lack of new evidence or arguments from the assessee, upheld the order, dismissing the appeal and confirming the addition. In conclusion, the Tribunal dismissed the appeal of the assessee, upholding the addition of Rs. 84,00,000/- made under section 68 of the Income Tax Act on account of share application money for Assessment Year 2009-10 based on the findings of the CIT(A) and the lack of new evidence or arguments presented during the proceedings.
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