2009 (12) TMI 33 - PUNJAB AND HARYANA HIGH COURT

Existence and genuineness of the liability – failure to failed to prove the existence, genuineness and creditworthiness of these share holders – held that - the aforesaid liability of the assessee cannot be said to have ceased to exist and the provision of Section 41 (1) and explanation to this provision are not applicable, because the assessee is still showing it as a liability in its books and has not written off the same. - Regarding the addition of ₹ 15,00,000/- on account of unexplained share capital, it has been held that at the time of the original assessment, the assessee had supplied the list of the persons along with their addresses to whom the shares were sold. The said list contained information, such as name, address and number of shares allotted. The AO issued enquiry letter under Section 133 (6) of the Act at random basis to 25 persons, out of whom some persons did not respond - Merely because some of the persons did not respond to the notice issued by the Assessing Officer under Section 133 (6) of the Act, it cannot be taken that the said transaction was ingenuine.