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2009 (12) TMI 727 - AT - Income TaxUnexplained cash credit u/s 68 - share application money unexplained - amount was never received as share capital/share application money but a camouflaged transaction - AO noted that as per the report of investigation wing it was found that the referred five companies were not carrying on actual business but were engaged in the business of providing accommodation entries and assessee is one of the beneficiaries of such accommodation entries HELD THAT:- In this case existence of share applicants has been shown by the assessee on papers which even could not be substantiated by proof that the existence is on the address provided to the assessee by the share applicants. the existence of share applicants were not proved. Therefore, the papers submitted itself by the assessee do not prove the existence of share applicant factually. Therefore merely on certain papers produced by the assessee it cannot be said that these share applicants were in existence who have actually applied for shares and were allotted the shares. The fact also remains that now the shares are acquired by the family members of the directors at much lesser price. This fact also should have been examined. The CIT (A) has deleted the addition for the reason that since the AO has not made any enquiry after the appellant furnished all these particulars, it has discharged its onus and no addition is called for u/s 68. The CIT (A) has also not examined whether the share applicant had any creditworthiness and the transaction was genuine. In such a situation the CIT (A) erred in deleting the addition as the AO failed to make any enquiry. Rather it was incumbent upon the CIT (A) to carry the enquiry further and should have done what the AO failed to do. As decided in Kapurchand Shrimal v. CIT[1981 (8) TMI 2 - SUPREME COURT] it is well known that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute. Since no further evidence is available before us to give a finding that the cash credit during the year has been proved, and since the authorities below also failed to conduct necessary enquiries in this regard, we remit the matter back to the file of the AO. The assessee is directed to place necessary evidence so as to justify the identity and creditworthiness of the creditor and genuineness of the transaction. For statistical purposes, the appeal is treated as allowed.
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