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TMI Blog2018 (11) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... , income certificate etc.., but the AO has not furnished the names of the persons and discussed in detail share applicant wise, the contents of the statement recorded from them and as to why the applicants lacking the source. In the absence of complete discussion, much reliance cannot be placed on the observations of the AO with regard to the credit worthiness in the case of 5 persons who were produced before the AO. AO even did not issue notice u/s 133(6) calling for the information from the share applicants. In the absence of any enquiries made, contents of confirmations cannot be held adversely against the assessee. It is a settled principle that suspicion whatever strong, the same cannot be held against the assessee unless it is pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the share application money. The AO asked the assessee to produce the investors and in response, the assessee produced five of such investors for verification from whom the statements were recorded by the AO and the AO observed the share applicants could not prove their credit worthiness and failed to produce any documentary evidence to prove their identity, profession, income certificate to establish their claims having paid the share application money. The assessee could not produce the remaining share applicants. Therefore, the Ld.AO found that mere furnishing of confirmation letters without any proof of their identity, source of income etc. cannot come to the rescue of the assessee. Therefore, viewed that all the persons who h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs to 3 lakhs on different dates during the year towards the share application money. The assessee has produced 5 persons for verification and all of them have confirmed having given the sums. The share applicants were having substantial source of income either from business or from agriculture. All of them have paid the share application money through bank cheques. Due to technical reasons, the allotment could not be done and the same was disclosed in the balance sheet. Thus, the Ld.AR argued that the assessee has discharged its onus to prove the genuineness of the transaction and thus the Ld.CIT(A) is not justified in confirming the addition made by the AO. The Ld.AR relied on the decision of ITAT, Visakhapatnam in the case of Meridian Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form all 25 persons which were placed in the paper book in page No.32 to 56. The assessee also furnished the details of the receipt of share application money, applicant wise with clear address in page No.30 to 31, Mode of payment of all the payments was through cheque / NEFT / RTGS. The cheque numbers were also furnished by the assessee. In the confirmation letter, the share applicants have confirmed the payment of share application money and also disclosed their source of income. Most of the sources of the income were stated to be business / agriculture / private job holders. Though the assessee produced 5 persons before the AO and the AO has given an observation that none of them have credit worthiness and did not produce any documen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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