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2012 (11) TMI 311 - AT - Income TaxUnexplained Investment u/s 68 – Share Application Money – Following the decision of court in case of [CIT vs. Oasis Hospitalities Pvt. Ltd., and Others 2011 (1) TMI 194 - DELHI HIGH COURT ] Furnishing of an affidavit by itself is not necessary proof to conclude that the transaction is genuine. It is well settled principle of law that to prove a credit entry in the books the assessee to establish three ingredients which (1) identity of investors (2) their creditworthiness and (3) genuineness of transaction - initial burden lies on the assessee to prove the genuineness of the transaction. In the present case, there is doubt regarding the identity of the share applicants and no material has been brought on record like balance-sheet or bank statements of the share applicants to show that they had capability to make investments in the shares. In the aforesaid factual background, sine the revenue authorities have not properly examined these aspects - restore the matter back to the AO who shall conduct such enquiry to find out as to whether the three companies which have invested in shares of the assessee really existed or not. If on enquiry, it is found that the companies did exist when they made investment and investment made by them are genuine,then no addition can be made u/s 68 of the Act. The AO may exercise his power to make enquiries with the concerned Registrar of companies to find out the real status of share applicants and after gathering all information, the AO shall complete the assessment after affording a reasonable opportunity of being heard to the assessee - In the result, the appeal filed by the Revenue is treated as allowed for statistical purpose.
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