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TMI Blog2007 (9) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... prove that the cash credit is unexplained or that the explanation given is not true, to make an addition under section 68 of the Income-tax Act? Held that:- The ultimate fact finding authority- the Tribunal in its order, which is impugned in these appeals, has recorded a clear finding to the effect that in the instant case, the Assessing Officer had listed the shareholders and found some of them were retired employees of the bank, some of them were working employees of the bank and rest of them were agriculturists. The Assessing Officer did not dispute that those persons did not exist. Though the Assessing Officer directed the assessee-company to produce the persons, he did not take the minimum pain of issuing notice to anyone of the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argely on the Assessing Officer? 3. Whether, on the facts and circumstances of the case, the Assessing Officer has to prove that the cash credit is unexplained or that the explanation given is not true, to make an addition under section 68 of the Income-tax Act?" The necessary facts as culled out from the statement of facts are as follows: For the assessment year 1996-97, the assessee-company filed its return of income on November 29, 1996, declaring a total loss of Rs. 72,21,172. The assessment was completed under section 143(3) of the Income-tax Act, 1961, on September 12, 1999, determining the net loss of Rs. 21,56,526 after considering the unexplained cash credit of Rs. 56,47,470. While processing the assessment, the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed before the Income-tax Appellate Tribunal. The Tribunal on the basis of the materials on record held that the assessee had discharged the onus cast upon it by providing the basic information, and the Assessing Officer failed to disprove the claim of the assessee as not genuine. By so holding, the Tribunal allowed both the appeals. The correctness of the said order is now put in issue before this court. We heard the argument of learned counsel on either side and perused the materials on record. The ultimate fact finding authority- the Tribunal in its order, which is impugned in these appeals, has recorded a clear finding to the effect that in the instant case, the Assessing Officer had listed the shareholders and found some of them w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of section 68 of the Act? When and in what circumstances would section 68 of the Act come into play? A bare reading of section 68 suggests that there has to be credit of amounts in the books maintained by an assessee; such credit has to be of a sum during the previous year; and the assessees offer no explanation about the nature and source of such credit found in the books; or the explanation offered by the asses sees in the opinion of the Assessing Officer is not satisfactory, it is only then the sum so credited may be charged to income-tax as the income of the assessees of that previous year. The expression 'the assessees offer no explanation' means where the assessees offer no proper, reasonable and acceptable explanation as regards th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase on hand and rejected the case of the Revenue. The relevant portion of the order reads as follows: "4. In CIT v. Stellar Investment Ltd. [1991] 192 ITR 287 (Delhi), where the increase in subscribed capital of the respondent-company, accepted by the Income-tax Officer and rejected by the Commissioner on the ground that a detailed investigation was required regarding the genuineness of subscribers to share capital, as there was a device of converting black money by issuing shares, with the help of formation of an investment, which was reversed by the Tribunal, the Delhi High Court held that even if it be assumed that the subscribers to the increased share capital were not genuine, under no circumstances the amount of share capital could b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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