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| The Tax Publishers2019 TaxPub(DT) 1590 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Where assessee had discharged burden placed upon it under section 68 to prove and establish identity and creditworthiness of share applicant and genuineness of the transaction, AO was not justified in making addition of share application amount under section 68 merely relying on statement of alleged entry operator recorded by investigation wing and that too, without affording opportunity of cross-examination to assessee.
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Income from undisclosed sources - Addition under section 68 - Receipt of share capital - AO relying on statement of alleged entry operator recorded by investigation wing--No opportunity of cross-examination given to assessee
AO received information from investigation wing as to alleged entry operators having provided bogus share application money to assessee-company. Accordingly, AO made addition of share application amount under section 68.Held: By filing evidences such as bank statement, audited annual accounts as well as the details of PAN number and copies of income-tax returns along with confirmations of share applicants share application forms, share holders' register and share transfer register, etc. assessee had discharged burden placed upon it under section 68 to prove and establish identity and creditworthiness of share applicant and genuineness of the transaction, therefore, addition made under section 68 and that too, without affording assessee an opportunity to cross-examine the alleged entry operator, was not justified.
REFERRED : (2018) 99 taxmann.com 45 (SC) : 2018 TaxPub(DT) 7167 (SC) in Pr. CIT, Central-1 v. Adamine Construction (P.) Ltd. and (2018) 98 taxmann.com 173 (SC) : 2018 TaxPub(DT) 5572 (SC) Pr. CIT v. Himachal Fibers Ltd.
FAVOUR : In assessee's favour.
A.Y. :
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