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2012 (9) TMI 579 - AT - Income TaxAddition u/s 68 on account of Share application money – Investor's company invested money in assessee’s share at a premium - Same were bought back by the promoters/director of assessee in the very next year at a 90% discount – Detailed inquiry has been made by the AO – Sending letters u/s 133(6) and personally visited on given address of investors – AO come to conclusion that they were just paper companies and did not exist in reality - Held that:- As no sign board was hang on the premises , neighbor told that office is closed long back and not listen the name of investor company. On an enquiry made from investor’s bank reveals that cash was deposited immediately prior to issue of cheque to the assessee and the account of these companies was closed immediately after transfer of funds. It seems there was no genuine transaction of share capital, the companies were not existed at all. Assessee himself routed his funds through these companies. Assessee could not rebut the same by bringing any positive material on record to substantiate the identity and authenticity of investors. Therefore, confirm the action of AO & CIT (A) for applying provisions of Sec 68 in respect of share capital received from company as well as individual investors. Appeal decides in favour of revenue.
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