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2016 (4) TMI 1228 - AT - Income TaxUnexplained cash credit u/s. 68 - proof of creditworthiness of the shareholders - Held that:- The creditworthiness of the shareholders is not proved because they did not had their own money as every cheque/draft issued in favour of the assessee is preceded by deposit of cash/cheque in the bank account of the shareholder and these share holders are merely name lenders. The genuineness of the transactions is also not proved as to how such a huge sum of money got invested by the share subscribers and that too at a huge premium when the company was merely a paper/shell company having no business/project worth in its hand. The shareholders could not be interrogated by the AO which was essential to unearth the truth as the assessee did not produced the shareholders nor they appeared before the AO in response to summons issued u/s 131. The blank transfer forms and receipts from the shareholders were found during survey with respect to transfer of these shares from shareholders to the persons to be nominated by the promoters, all the share application forms were filled in the same handwriting, there was no serial numbers in share application form, the acknowledgment of receipt of share application forms were not given to the share subscribers by the assessee and these are not usual conduct of the carrying on of business. We are of the considered view that the Revenue has rightly made the addition received as share subscription as unexplained cash credit u/s. 68 - Decided against assessee.
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