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2015 (5) TMI 1227 - ITAT AHMEDABADAddition u/s 68 - bogus share application money - HELD THAT:- No such evidence appears to have been gathered by the department in course of search proceedings against the two parties. On perusal of bank statement of these two parties, it can be gathered that no cash has been deposited by these parties before issuing cheques to assessee towards share application money. Shares issued to alleged two companies were transferred to Director of the company on 31.07.2008 long before search conducted in case of Shri Mukesh Choksi on 25.11.2009 and so the statement of Shri Mukesh Choksi recorded after the transfer of shares cannot be relied upon in absence of any evidence collected in course of search in case of Shri Mukesh Choksi indicating transfer of cash. We find that all the transactions were duly supported by the Share application form, acknowledgement of return of income, audited financial statements & bank statements, Memorandum of Association (hereinafter referred as “MOA”) and Articles of Association (hereinafter referred as AOA””) of the share applicant. All the share application monies have been received through proper banking channel and there is no evidence that assessee has paid any money in cash to the share applicant in consideration of cheque received from share. No inquiry is made by the Assessing Officer once the assessee has discharged his primary onus to prove the identity, genuineness and creditworthiness of the share applicants. On perusal of the bank statements of share applicant, it can be seen that no cash has been deposited by them before issue of cheque to assessee towards share application money. None of the parties are related to assessee company. The assessee has proved all the three ingredients of proving a genuine cash credit by establishing identity (limited/listed companies), genuineness (transactions through normal banking channel) and creditworthiness (IT returns and balance sheet with huge share capital). If the Assessing Officer doubts the source of the source of the source, he was free to conduct inquiries in the case of persons from whom assessee has received funds. However, on that count, addition cannot be made u/s 68 in the hands of the assessee once the assessee discharges the onus on it as per the requirement of section 68. There was a clear lack of inquiry on the part of the assessing officer once the assessee had furnished all the material - Decided in favour of assessee.
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