INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Receipt of share capital along with premium - No response to summons issued under section 131 by share applicants--Identity, creditworthiness and genuineness proved by assessee

AO required assessee-company to prove genuineness of share capital along with premium received by it. Assessee furnished various evidences in that regard. However, AO made addition under section 68 on the ground that in response to summons under section 131 shareholder companies had not appeared for personal deposition. Held: Assessee had placed on record copies of replies to notices under section 133(6) (certified by AO along with bank statements) and PANs of share applicants return filed with ROC copy of share application by subscriber, Board Resolution shareholders' register, and register, etc. Thus, assessee had discharged primary onus cast on it to prove identity and creditworthiness of share applicants and genuineness of impugned transactions. In case AO had any doubt about shareholders, nothing stopped him from taking appropriate action or proceeding against these shareholders. In view of this, addition made under section 68 was not justified.

Relied:CIT v. Orissa Corporation Pvt. Ltd. (1986) 159 ITR 78 (SC) : 1986 TaxPub(DT) 1425 (SC), CIT v. Value Capital Services Pvt. Ltd. ITA No. 348/2008 and Pr. CIT v. Chain House International (P) Ltd. (2019) 103 Taxmann.com 435 (SC) : 2019 TaxPub(DT) 1432 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 14A(2)

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