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2013 (11) TMI 674 - AT - Income TaxAssessment of share application money as unexplained income u/s.68 - Revenue had followed the money trail up to fourth layer, i.e., whereat the cash was found deposited in the bank accounts of persons with no credibility - directors of the investors companies, admitting to the transaction beign bogus inasmuch as they are only providing accommodation entries for a commission - Held that:- Reliance has been placed on the judgment in the case of CIT vs. Youth Construction P. Ltd. [2012 (11) TMI 595 - DELHI HIGH COURT], wherein it was observed by the Hon’ble Court that Section 68 of the Income-tax Act, 1961, applies equally to share application monies received by an assessee and, therefore, the burden is on the assessee to prove the nature and source thereof, to the satisfaction of the Assessing Officer. It involves there ingredients, namely, the proof regarding identity of the share applicants, their creditworthiness to purchase the shares and the genuineness of the transaction as a whole. In the instant case, assessee has done little excpect raising a legal plea of non production of the said directors or deponents for cross examination. The same has been disregarded by the Revenue on the ground that sufficient opportunity is toward the same were granted during the course of the proceedings before the investigation wing and which had deliberately evaded by the assessee on pretext or the other - Furnishing of the documentary evidences, viz. the share application money, balance-sheet of the creditor companies is of little evidential value in the facts of unearth and late bear by the Revenue. Rather, it needs to be appreciated that if the evidence by way of book entries were to be itself sufficient to prove cash credits, section 68 would itself to be misconceived and redundant inasmuch as it is only based on the credit appearing in the books of account – Decided against the Assessee. Whether assessee's loss is a speculation loss in view of the provisions of explanation to section 73 o the Act - Assessee's principle business being trading in shares and securities, the A.O. has invoked the said provision and which has found confirmation by the ld. CIT(A) on the same ground – Held that:- There has been no business activity during the year and the impugned loss is on account of valuation of the inventories, would make no difference in the value of of stock is an integral part o the process of determination of business income – Reliance has been placed on the decision of the case CIT vs. Lokmat Newspapers Pvt. Ltd. [2010 (2) TMI 94 - BOMBAY HIGH COURT] – Decided against the Assessee.
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