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TMI Blog2021 (3) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company and also the directors of the share allottee companies and fixed the date of hearing on 23.02.2015. According to the AO, there was no compliance. So final opportunity was given to the assessee to comply with the physical appearance of the directors. However, the AO notes that none appeared. According to the AO, since the Balance Sheet reveals that fresh share capital including share premium has been received by the assessee and since recorded in the Balance Sheet, it establishes the credit of the same in the books of account maintained by the assessee. According to the AO, since responses to the queries raised by him has not been satisfactorily explained, the nature and source of the said sum found credited could not be established, he was of the opinion that the assessee has failed to discharge the onus of receiving the huge money as share capital. Therefore, he added the sum of Rs. 1,80,00,000/- (though Rs. 2,10,00,000 received by the assessee in this AY as share capital and share premium, the AO accepted the share capital invested by three individuals to the tune of Rs. 30,00,000/- and did not accept the amount invested by companies). Aggrieved, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact can be discerned from a perusal of the audited financials (annual report) a copy of which is filed from page 28 to 59 of the paper book. A perusal of page 36 of paper book this fact is noted i.e, is incorporated 32 years back as well as about the fact of listing in Calcutta Stock Exchange is stated therein. 5. Thereafter, the Ld. AR drew our attention to the Balance Sheet of M/s. Quest Financial Services Ltd. which is placed at page 40 of paper book from where he drew our attention to the own funds of the said company from where it is noted that the share capital and reserve and surplus as on 31.03.2011 (AY 2011-12) (which means the opening balance for the AY 2012-13) wherein we note that M/s. Quest Financial Services Ltd. had Rs. 13.8 cr. (as share capital) and Rs. 3.5 cr. (as reserve and surplus) which means M/s. Quest Financial Services Ltd. had more than Rs. 16 cr. as opening balance for this AY 2012-13 i.e. as on 01.04.2011. Thereafter, the Ld. AR drew our attention to the Balance Sheet as on 31.03.2012 (AY 2012-13) wherein the M/s Quest Financial Services Ltd's share capital has increased manifold by more than Rs. 123 cr. which according to the Ld. AR was on the event o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere it is discerned that M/s. Quest Financial Services Ltd. has transferred an amount of Rs. 1 crore by RTGS on 27.03.2012. Perusal of page 67 of paper book reveals the source of source of this amount. Thus, according to the Ld. AR, the assessee has discharged the burden on it to prima facie prove the identity, creditworthiness and genuineness of M/s. Quest Financial Services Ltd. which fact has not been rebutted by AO. 6. Thereafter, he drew our attention to the next corporate entity M/s. Anurag Infrastructure Ltd. which subscribed for shares in assessee company. The Ld. AR drew our attention to the fact that M/s. Anurag Infrastructure Ltd. had filed ITR acknowledgment for the AY 2012-13 and its PAN is AAJCA1464E and it is assessed by ITO, Ward-50(4), Kolkata. Ld. AR drew our attention to pages 69 to 85 of the paper book wherein financial statement (audited accounts) of M/s. Anurag Infrastructure Ltd. is found placed. He drew our attention to page 75 of paper book wherein the Balance Sheet as on 31.03.2012 is found placed. Thereafter, the Ld. AR contended that the said company had own funds of Rs. 81 lacs as share capital and Rs. 39.20 cr. as reserve and surplus i.e. Rs. 40 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dy. CIT v. Rohini Builders [2002] 256 ITR 360 wherein it has been held that the onus of the assessee stands fully discharged if the identity of the creditor is established and actual receipt from such creditors is proved, then in that event no addition u/s. 68 of the Act can be made in the assessee's hand and in case if the AO is still not satisfied, then he should proceed against the creditors. The Ld. AR also cited the decision of the Hon'ble jurisdictional High Court in the case of CIT Vs. Dataware Pvt. Ltd. (ITAT No. 263 of 2011 dated 21.09.2011) wherein the Hon'ble court observed that if the AO of the assessee is not satisfied with the creditworthiness of the creditor, then the proper course of action is that he (AO of the assessee) should undertake is that, he (the AO of the assessee) should enquire from the AO of the creditor and if it turns out that the AO of the creditor has accepted the transaction i.e if the AO of the creditor has accepted the investment made in assessee company, then no adverse view should be taken against the creditor regarding the creditworthiness. Thus, it was prayed by the Ld. AR that no addition u/s. 68 of the Act was warranted in respect of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he shareholder, 10. In the light of the aforesaid documents the assessee pleads that no addition u/s. 68 of the Act was warranted. Before we adjudicate as to whether the lower authorities action is right, let us refresh ourselves the provisions (section 68 of the Act) and the settled legal position. 11. Section 68 under which the addition has been made by the Assessing Officer reads as under: "68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. " The phraseology of section 68 is clear. The Legislature has laid down that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income-tax as the income of the assessee of that previous year. In this case the legislative mandate is not in terms of the words 'shall' be charged to income-tax as the income of the assessee of that previous year". The Supreme Court while interpreting sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to draw and adverse inference against the assessee. in the case of six creditors who appeared before the Assessing Officer and whose statements were recorded by the Assessing Officer, they have admitted having advanced loans to the assessee by account payee cheques and in case the Assessing Officer was not satisfied with the cash amount deposited by those creditors in their bank accounts, the proper course would have been to make assessments in the cases of those creditors by' treating the cash deposits in their bank accounts as unexplained investments of those creditors under section 69. 13. In the case of Nemi Chand Kothari 136 Taxman 213, (supra), the Hon'ble Guahati High Court has thrown light on another aspect touching the issue of onus on assessee under section 68, by holding that the same should be decided by taking into consideration the provision of section 106 of the Evidence Act which says that a person can be required to prove only such facts which are in his knowledge. The Hon'ble Court in the said case held that, once it is found that an assessee has actually taken money from depositor/lender who has been fully identified, the assessee/borrower cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ample freedom to the Assessing Officer to make inquiry not only into the source(s)of the creditor but also of his (creditor's) sub-creditors and prove, as a result, of such inquiry, that the money received by the assessee, in the form of loan from the creditor, though routed through the sub-creditors, actually belongs to, or was of, the assessee himself. In other words, while section 68 gives the liberty to the Assessing Officer to enquire into the source/source from where the creditor has received the money, section 106 makes the assessee liable to disclose only the source(s) from where he has himself received the credit and IT is not the burden of the assessee to prove the creditworthiness of the source(s) of the sub-creditors. If section 106 and section 68 are to stand together, which they must, then, the interpretation of section 68 are to stand together, which they must, then the interpretation of section 68 has to be in such a way that it does not make section 106 redundant. Hence, the harmonious construction of section 106 of the Evidence Act and section 68 of the Income- tax Act will be that though apart from establishing the identity of the creditor, the assessee must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to try to find out as to what sources from where the creditor had received the amount, his special knowledge under section 106 of the Evidence Act may very well remain confined only to the transactions, which he had' with the creditor and he may not know what transaction(s) had taken place between his creditor and the sub-creditor... " ********** "In other words, though under section 68 an Assessing Officer is free to show, with the help of the inquiry conducted by him into the transactions, which have taken place between the creditor and the sub-creditor, that the transaction between the two were not genuine and that the sub-creditor had no creditworthiness, it will not necessarily mean that the loan advanced by the sub-creditor to the creditor was income of the assessee from undisclosed source unless there is evidence, direct or circumstantial, to show that the amount which has been advanced by the sub-creditor to the creditor, had actually been received by the subcreditor from the assessee ...." ********** "Keeping in view the above position of law, when we turn to the factual matrix of the present case, we find that so far as the appellant is concerned, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir affidavits; (iii) their full addresses and GIR numbers and permanent account numbers. It has found that the assessee's burden stood discharged and so, no addition to his total income on account of cash credit was called for. In view of this finding, we find that the Tribunal was right in reversing the order of the AA C, setting aside the assessment order." 15. We also take note of the decision of the Hon'ble High Court, Calcutta in the case of S.K. Bothra & Sons, HUF v. Income-tax Officer, Ward- 46(3), Kolkata 347 ITR 347 wherein the Court held as follows: "15. It is now a settled law that while considering the question whether the alleged loan taken by the assessee was a genuine transaction, the initial onus is always upon the assessee and if no explanation is given or the explanation given by the appellant is not satisfactory, the Assessing Officer can disbelieve the alleged transaction of loan. But the law is equally settled that if the initial burden is discharged by the assessee by producing sufficient materials in support of the loan transaction, the onus shifts upon the Assessing Officer and after verification, he can call for further explanation from the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been considered. By not doing so the Tribunal committed grave error in law in upsetting the judgment in the order of the Commissioner of Income-tax (Appeals). 9. In this connection he has drawn our attention to a decision of the Supreme Court in the case of Udhavdas Kewalram v. CIT [19671 66 ITR 462. In this judgment it is noticed that the Supreme Court as proposition of law held that the Tribunal must In deciding an appeal, consider with due care, all the material facts and record its finding on all the contentions raised by the assessee and the Commissioner in the light of the evidence and the relevant law. 10. We find considerable force of the submissions of the learned counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore, it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter the creditworthiness. As rightly pointed out by the learned counsel that the Commissioner of Income-tax (Appeals) has taken the trouble of examining of all other materials and documents, viz., confirmatory statements, invoices, ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax (Appeals). The appeal is allowed. 17. When a question as to the creditworthiness of a creditor is to be adjudicated and if the creditor is an Income Tax assessee, it is now well settled by the decision of the Calcutta High Court that the creditworthiness of the creditor cannot be disputed by the AO of the assessee but the AO of the creditor. In this regards our attention was drawn to the decision of the Hon'ble High Court, Calcutta in the COMMISSIONER OF INCOME TAX, KOLKA TA-Ill Versus DATAWARE PRIVATE LIMITED ITAT No. 263 of 2011 Date: 21st September, 2011 wherein the Court held as follows: "In our opinion, in such circumstances, the Assessing officer of the assessee cannot take the burden of assessing the profit and loss account of the creditor when admittedly the creditor himself is an income tax assessee. After getting the PAN number and getting the information that the creditor is assessed under the Act, the Assessing officer should enquire from the Assessing Officer of the creditor as to the genuineness" of the transaction and whether such transaction has been accepted by the Assessing officer of the creditor but instead of adopting such cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer on his part called for the details from the assessee and also from the share applicants and analyzed the facts and ultimately observed certain abnormal features, which were mentioned in the assessment order. The Assessing Officer, therefore, concluded that nature and source of such money was questionable and evidence produced was unsatisfactory. Consequently, the Assessing Officer invoked the provisions under Section 68/69 of the Income Tax Act and made addition of Rs. 24,00,000/-. On appeal the Learned CIT (A) by following the decision of the Supreme Court in the case of Cl. T. vs. M/s. Lovely Exports Pvt. Ltd., reported in (2008) 216 CTR 195 allowed the appeal by holding -that share capital/premium of Rs. 24,00,000/- received from the investors was not liable to be treated under Section 68 as unexplained credits and it should not be taxed in the hands of the appellant company. As indicated earlier, the Tribunal below dismissed the appeal filed by the Revenue. After hearing the learned counsel for the appellant and after going through the decision of the Supreme Court in the case of Cl. T. vs. M/s. Lovely Exports Pvt. Ltd. [supra], we are at one with the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us reasons. The Commissioner of Income Tax (Appeals) took note of the observation of the Assessing Officer that enquiry conducted by the Income Tax Inspector had revealed that nine persons making applications for 900 shares were not available at the given address and rightly concluded that the total share capital issued by the Assessee Company could not be added as unexplained cash credit under 'Section 68 of the Income Tax Act. Moreover, if the nature and source of investment by any shareholder, in shares of the Assessee Company remained unexplained, liability could not be foisted on the company. The concerned shareholders would have to explain the source of their fund. The learned Commissioner on considering the submissions of the, respective parties and considering the materials, found that the Assessing Officer had applied the provisions of Section 68 of the Income Tax Act arbitrarily and illegally and in any case without giving the assessee adequate opportunity of representation and/or hearing. Learned Tribunal agreed with the factual findings of the learned Commissioner and accordingly the learned Tribunal dismissed the appeal of the Revenue and affirmed the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal below erred in law in deleting the addition of Rs. 8,52,000/-, Rs. 91,50,000/- and Rs. 13,00,000/- made by the Assessing Officer on account of share capital, share application money and investment in HTCCL respectively. After hearing Md. Nizamuddin, learned Advocate appearing on behalf of the appellant and after going through the materials on record, we find that all such application money were received by the assessee by way of account payee cheques and the assessee also disclosed the complete list of shareholders with their complete addresses and GIR Numbers for the relevant assessment years in which share application was contributed. It further appears that all the payments were made by the applicants by account payee cheques. It appears from the Assessing Officers order that his grievance was that the assessee was not willing to produce the parties who had allegedly advanced the fund. In our opinion, both the Commissioner of Income-tax (Appeals) and the Tribunal below were justified in holding that after disclosure of the full particulars indicated above, the initial onus of the assessee was shifted and it was the duty of the Assessing Officer to enquire whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge 27 and 61 of paper book). This company was having a paid up capital with free reserve and surplus of Rs. 123 cr. plus 48.57 cr. respectively as on 31.03.2012 and its opening balance as on 01.04.2011 was to the tune of Rs. 16 cr. In this year as per the order of the Hon'ble Calcutta High Court three (3) other companies M/s. Dristi Suppliers, M/s. Pran Jeevan Distributors and M/s. Reward Agencies were amalgamated with the assessee company and the effective date of amalgamation was on 28.09.2011 (page 36 of paper book). On examination of the bank statement it is taken note that there is no deposit of cash before transfer of Rs. 1 crore to the assessee company. The details of source of fund from which the company had made the share application are also available from a perusal of the bank statement and confirmation given by this company is seen placed at page 67 of the paper book. 23. In respect of M/s. Anurag Infrastructure Ltd. the Ld. AR drew our attention to pages 68 to 93 of paper book from where we note that this company invested a sum of Rs. 80 lacs in the assessee company. The share application was made through banking channel on 28.03.2012 through Corporation Bank. This co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra, these Companies are having capital in several crores of rupees and the investment made in the appellant company is only a small part of their capital. These transactions are also duly reflected in the balance sheets of the share applicants, so creditworthiness is proved. Even if there was any doubt if any regarding the creditworthiness of the share applicants was still subsisting, then AO should have made enquiries from the AO of the share subscribers as held by Hon'ble jurisdictional High Court in CIT vs DATAWARE (supra) which has not been done, so no adverse view could have been drawn. Third ingredient is genuineness of the transactions, for which we note that the monies have been directly paid to the assessee company by account payee cheques out of sufficient bank balances available in their bank accounts on behalf of the share applicants. It will be evident from the paper book that the appellant has even demonstrated the source of money deposited into their bank accounts which in turn has been used by them to subscribe to the assessee company as share application. Hence the source of source of source is proved by the assessee in the instant case though the same is not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... black money into white money or accounted money and the Ld. CIT(A) ought to have held that the assessee had not established the genuineness of the transaction. " IT A No. 1669/KoI/2009-C-AM M/s. Global Mercantiles Pvt. Ltd 11 Held After hearing the learned counsel for the appellant and after going through the decision of the Supreme Court in the cases of CIT vs M/s Lovelv Exports Pvt Ltd, we are at one with the tribunal below that the point involved in this appeal is covered by the said Supreme Court decision in favour of the assessee and thus, no substantial question of law is involved in this appeal. The appeal is devoid of any substance and is dismissed. 3.4.2. In view of the aforesaid findings and respectfully following the decision of the apex court (supra) and Jurisdictional High Court (supra) , we find no infirmity in the order of the Learned CIT(A) and accordingly, the ground no.2 raised by the Revenue is dismissed. 4. The last ground to be decided in this appeal of the Revenue is as to whether the Learned CIT(A) is justified in deleting the addition u/s 68 of the Act made in respect of allotment of shares to 20 individuals for an amount of Rs. 57,00,000/- in the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal before us by filing the following ground:- "That in the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made u/s 68 in respect of the allotment of shares to 20 numbers of individual investors for an amount of Rs. 57 lakhs, where genuineness of the transactions and creditworthiness of the investors were not established." 4.3. The Learned DR prayed for admission of the additional ground raised before us and vehemently supported the order of the Learned AO. In response to this, the Learned AR fairly conceded to admission of this additional ground and vehemently supported the order of the Learned CIT(A). 4.4. We have heard the rival submissions and perused the materials available on record including the detailed paper book filed by the assessee. We find that the additional ground raised by the assessee separately before us vide its covering letter dated 9. 12.2011 is admitted as it appears to be a genuine and bonafide error of omission on the part of the Revenue from not raising this ground in the original grounds of appeal filed along with the memorandum of appeal. Moreover, it does not require any fresh examination of facts. Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P) Ltd in GA No. 3296 of 2010 ITAT No. 241 of 2010 dated 10.1.2011, wherein the questions raised before their lordships and decision rendered thereon is as under:- - "On the facts and in the circumstances of the case, Ld. CIT(A) ought to have upheld the assessment order as the transaction entered into by the assessee was a scheme for laundering black money into white money or accounted money and the Ld. CIT(A) ought to have held that the assessee had not established the genuineness of the transaction." Held After hearing the learned counsel for the appellant and after going through the decision of the Supreme Court in the cases of CIT vs M/s Lovely Exports Pvt Ltd, we are at one with the tribunal below that the point involved in this appeal is covered by the said Supreme Court decision in favour of the assessee and thus, no substantial question of law is involved in this appeal. The appeal is devoid of any substance and is dismissed." 6.2. We find that the issue is also covered by the decision of Hon'ble Delhi High Court in the case of CIT vs Value Capital Services P Ltd reported in (2008) 307 ITR 334 (Del) , wherein it was held that: "In respect of amounts shown as recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecords the addresses of the nine companies were different from the address as per Form filed with him. The AO issued notices u/s.133(6) to all the companies at the addresses furnished in Form 2 as filed with him, which were duly served at the given addresses. The A0 argued that the letters should not have been served at the given address by the assessee. He served a show a cause notice dated 09.12.2011 asking for the explanation from the assessee as to how the notices u/s. 133(6) could be served to these nine companies who had different address as per ROC records. The AO was explained vide letter dated 20.12.2011 of the assessee that those companies had changed their addresses since filing of Form 2 with the Registrar. Further, it was none of the business of the assessee to question the addresses of the applicants as long as they affirm the address. The applicants were duly incorporated bodies under the Companies Act. 1956 since long. They have been regularly filing their returns of income under the Income Tax Act and are being assessed by the Revenue since long. Some of them are even registered as Non-Banking Financial Companies with Reserve bank of India. They have been filing re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are application transactions. However we find that all the money received in the form of share capital is duly supported with the requisite document as discussed above. To our mind the basis on which the addition was made by the AO is not tenable. The Ld. DR also could not brought anything on record to controvert the findings of the Ld. CIT(A). In view of above we find no reason to interfere in the order of the Id. CIT(A). Accordingly the ground raised by Revenue is dismissed." (d) The Ld ITAT Kolkata in ITO vs Cygnus Developers (I) P Ltd in ITA No. 282/Kol/2012 dated 2.3.2016. In this the decision the Ld. Tribunal held as follows: "6. On appeal by the assessee the CIT(A) deleted the addition made by the AO observing as follows "6) I have considered the submission of the appellant and perused the assessment order. I have also gone through the details and documents filed by the appellant company in the course of assessment: proceedings vide letter dt. 3-10-2007. On careful consideration of the facts and in law I am of the opinion that the AO was not justified in making, the addition aggregating to Rs. 54,00,000/- u/s.68 of the Act being the amount of share application money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llahabad High Court took a view that non production of the director of a Public Limited company which is regularly assessed to Income tax having PAN, on the ground that the identity of the investor is not proved cannot be sustained. Attention was also to the similar ruling of the ITAT Kolkata bench in the case of ITO vs Devinder Singh Shant in IT A No.20BIKo112009 vide order dated 17.04.2009. 9. We have considered the rival submissions., We are of the view that order of CIT(A) does not call for any interference. It may be seen from the grounds of appeal raised by the Revenue that the Revenue disputed only the proof of identity of the shareholder. In this regard it is seen that for A Y.2004-05 Shree Shyam Trexim Pvt. Ltd., was assessed by ITO, Ward- 9(4), Kolkata and the order of assessment u/s/143(3) dated 25.01.2006 is placed in the paper book. Similarly Navalco Commodities Pvt. Ltd., was assessed to tax u/s 143(3) for A Y.2005-06 by I TO, Ward- 9(4), Kolkata by order dated 20.03.2007. Similarly Jewellock Trexim Pvt. Ltd was assessed to tax for A Y.2005-06 by the very same ITO- Ward- 9(3), Kolkata assessing the Assessee. In the light of the above factual position which is not di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt observed that in that judgment the Assessing Officer had brought on record enough corroborative evidence to show that the assessee had routed unaccounted monies into its books through medium of share subscription. The share applicants had confessed that they were "accommodation entry providers". The Assessing Officer in the latter case was able to prove with enough material that the share subscription was a pre-meditated plan to route unaccounted monies. In the present case however the Department was unable to bring any material whatsoever shows that share application was in the nature of accommodation entries. The Court observed that the appellant had filed sufficient documentary evidences to establish the identity and creditworthiness of the share applicant and the genuineness of the transaction. The AO however chose to sit back with folded hands till the assessee exhausted all the evidence in his possession and then merely reject the same without conducting any inquiry or verification whatsoever. The Court thus held that the decision of CIT Vs Novo Promoters & Finlease (P) Ltd (342 ITR 169) was not applicable to the facts of the case. Instead it was held that the issue in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee as has been arrived by the Investigation wing of the department. As such entries of Rs. 5~50/000/- received by the assessee are treated as an unexplained cash credit in the hands of the assessee and added to its income. Since I am satisfied that the assessee has furnished inaccurate particulars of its income/ penalty proceedings under Section 271(1)(c) are being initiated separately. The facts of Nova Promoters and Finlease (P) Ltd. (supra) fall in the former category and that is why this Court decided in favour of the revenue in that case. However, the facts of the present case are clearly distinguishable and fall in the second category and are more in line with facts of Lovely Exports (P) Ltd. (supra). There was a clear lack of inquiry on the part of the Assessing Officer once the assessee had furnished all the material which we have already referred to above. In such an eventuality no addition can be made under Section 68 of the Income Tax Act 1961. Consequently, the question is answered in the negative. The decision of the Tribunal is correct in law" 28. The case on hand clearly falls in the category where there is lack of enquiry on the part of the A. O. as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in all cases of share capital added under Section the ratio of Lovely Exports (supra) is attracted, irrespective of the facts, evidence and material. " 29. In this case on hand, the assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants, thereafter the onus shifted to AO to disprove the documents furnished by assessee. If he could not do so, then evidence furnished by assessee cannot be brushed aside by the AO to draw adverse view and such an action cannot be countenanced. In the absence of any investigation, much less gathering of evidence by the Assessing Officer against the assessee, we hold that addition cannot be sustained merely based on inferences drawn by circumstance. Applying the propositions laid down in these case laws to the facts of this case, we are inclined to delete the addition confirmed by the Ld. CIT(A). 30. To sum up section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source of it shall be assessed as its undisclosed income. In the facts of the present case, both the nature & source of the share application and premi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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