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2014 (2) TMI 751 - HC - Income TaxIncome from undisclosed sources u/s 68 of the Act – Share application money – Held that:- In the remand report, the Commissioner (Appeals) had been informed that the bank statements sought for were given in respect of a limited period - the bank statements of the three companies for the same period were sought -These established a clear pattern - The accounts did not disclose large volume of transactions - All these cash deposits were made into accounts the same day or on proximate days, and the pay orders given to apply to the shares were issued from a far-off bank branch in NOIDA - These, together with the share applicants’ lack of resources and the woefully inadequate share capital, as well as the authorized and subscribed share capital of the assessee showed that the transaction claimed to have resulted in receipt of share money was dubious. The decision in CIT v. Lovely Exports Pvt. Ltd. [2008 (1) TMI 575 - SUPREME COURT OF INDIA] followed - the assessee is under an obligation to dispel any doubts regarding the genuineness of an investor and the genuineness of the transaction - though the assessee furnished particulars relating to three share applicants, the further inquiry made by the AO raised more questions than answers - The share applicants’ lack of resources, the assessee’s position vis-à-vis share amounts received and its commercial condition all pointed to the amount received by it falling within the mischief of Section 68 as unexplained amounts - Decided against Assessee.
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