CIT v. Morani Automotives (P.) Ltd.

INCOME TAX ACT, 1961

--Income from undisclosed sources--Addition under section 68Share capital contribution and unsecured loans--During assessment proceedings, AO made additions on account of unexplained share capital contribution and unexplained unsecured loans. Assessee submitted evidence before CIT(A) in regard to creditworthiness and genuineness of share capital contribution and unsecured loan. On the basis of above, CIT deleted the addition and found that all requisite confirmation with particulars of contributors and creditors were not in doubt. Tribunal upheld order of CIT(A). Revenue contended that deletion of addition merely on basis of confirmation was not justified and onus to prove genuineness of transaction was on the assessee. Held: Since existence of investors and creditors and their confirmations had been obtained and same were found to be satisfactory, assessee had discharged initial burden and therefore, addition made under section 68 was not sustainable. Hence, no interference was called for in findings of appellate authorities.