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2012 (11) TMI 595 - DELHI HIGH COURTAddition u/s 68 - ingenuine share transactions - ITAT deleted the addition - reopening of assessment - Held that:- AO had examined the bank accounts and had deduced a pattern by which the bank accounts were used only as a conduit to receive the monies and pay them out on the same day. This pattern, coupled with the general admission made by Pradeep Kumar Jindal one of the directors of company admitted to providing accommodation entry to the assessee and the failure of the share applicants to produce the directors before the AO, all taken cumulatively, should have forced Tribunal necessitating a deeper probe into the matter. The Tribunal chose to rest its decision on the sole fact that the share applicants had established there identity by filing confirmation letters and copies of their income tax returns. This is hardly sufficient for the purpose of discharging the creditworthiness of the share applicants and the genuineness of the transactions. Invoking Section 68 involves three ingredients, namely, the proof regarding identity of the share applicants, their creditworthiness to purchase the shares and the genuineness of the transaction as a whole. The Tribunal failed to keep in mind these aspects of the matter and has chosen to dispose of the appeal on the limited question of the identity of the shareholders. The present case is one where there is enough material in the possession of the Assessing Officer which warrants explanation from the assessee regarding the nature and source of the share application monies - matter remitted back to ITAT for fresh decision - decided against the assessee
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