2007 (10) TMI 412 - MADHYA PRADESH HIGH COURT

Share application money – genuineness of transactions – Held that: Section 68 of the enjoined the assessee to offer an explanation about the nature and source of the sum found credited in his books and if the explanation was not satisfactory, the amount can be credited and charged to income-tax as income of the assessee. - Since the assessee, though tried to explain the genuineness of the credit on the basis of letters of confirmation, it could not be explained as to how the transaction was materialised when the companies were not in existence and the amount was paid by cheque only on the date on which the amount was credited to the account of the company. - merely by filing a confirmation letter the burden could not be discharged when the enquiries revealed that the company was not existent nor any books of accounts or directors were traceable.– ITAT order quashed – Decided in favor of revenue