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2019 (5) TMI 946 - ITAT INDOREUnexplained share application money - Addition u/s 68 - scrutiny assessment followed by serving of notices u/s 143(2) and 142(1)(ii) - as per CIT-A the share applications were private placement, hence the applicants had full knowledge about the share applicants and was definitely in a position to produce the principle officers of the companies which he failed to do so. By not doing so the applicant failed to discharge its onus u/s 68 - HELD THAT:- In the light of the judgment in the case of Principal Commissioner of Income Tax (Central)-1 V/s NRA Iron & Steel Pvt. Ltd [2019 (3) TMI 323 - SUPREME COURT] we find that the facts are almost similar so much so that the share application was received from two companies based at Indore and Kolkata. Apart from furnishing the financial statement, bank statements and income tax returns assessee could not produce any of the Principal Officer of the company. Detailed investigation was carried out by Ld. Assessing Officer giving no positive results favouring assessee. A perusal of the financial statement shows that in the case of BPO Finance & Investments Pvt. Ltd there is no turnover during the year. Petty expenses of ₹ 57,531/- were incurred against NIL revenue and net loss of ₹ 57,531/- was carry forwarded. As against this picture of Profit & Loss Account having NIL turnover and loss of ₹ 57,531/- there stands reserve and surplus of ₹ 125.38 crores on the liability side. Investment in other companies is at ₹ 127.31 crores on the asset side. Bank transactions in BPO Finance & Investment Pvt. Ltd placed at page 10 & 11 shows that huge inflow and outflow of the huge amounts appearing round of the year but having no nexus with the regular business of the company for which it is incorporated. Genuineness of the transactions of the share application money has not proved and also the creditworthiness of both the share applicants namely Rolled Gold Industries and BPO Finance Investment Pvt. Ltd has not proved as they have no regular means to invest in the share capital of the assessee company. - A.O has justified in invoking the provisions of Section 68 of the Act making the addition for unexplained share application money - Decided against assessee
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