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2014 (9) TMI 83 - AT - Income TaxShare application/ share capital subscribed – Additions u/s 68 as undisclosed income – Admissibility of statements made - accommodation entry providers - Held that:- Sufficient material has been brought on record by the department to prove that appellant introduced its own unaccounted money in the garb of share application - The initial source of funds in the case of allottee companies remains unexplained - Statements of Mr. Ram Dinesh Sharma, Mukesh Choksi and Jayesh Patel clearly indicate the nature of accommodation entry business carried out by the four allottee companies - an iota of doubt that the transactions are bogus. The addition is made u/s. 68 of the Act on the ground of unexplained cash credit - as per the provisions of section 68, the initial onus lies upon the assessee to prove the nature and source of amount credited in his books of account - this initial onus was discharged by the assessee by furnishing documents like MOA, AOA, share application & board resolution, Certificate of Incorporation, Certificate of Commencement, acknowledgements of ITRs, audited accounts etc. of concerned companies - the onus shifted upon the Department and it was for the Department to bring on record relevant material to show that why inspite of the documents, the addition is still to be made in the hands of the assessee - the Department has endeavoured to discharge its burden on the basis of statements recorded by it. The assessee requested for cross-objection of the maker of the statement - the AO also made an attempt to allow the assessee opportunity to cross-examine the makers of the statement by issuing summons to them - the cross-examination could not take place because of failure on the part of the makers of the statements to appear on the appointed date – but, thereafter the AO did not take any step to allow effective opportunity to the assessee to cross-examine the makers of the statements - the assessee was not allowed any real opportunity to cross-examine the persons who made the statement at the back of the assessee - the statement of those persons cannot be read against the assessee – relying upon Heirs and Legal Representatives of Late Laxmanbhai S. Patel Vs. Commissioner of Income Tax [2008 (7) TMI 544 - GUJRAT HIGH COURT] - the statements of the persons are not admissible evidence against the assessee - In absence of these statements, no other material has been brought on record by the Revenue to show that why still the amount should be treated as income of the assessee when the assessee furnished all the documents which were available with it to discharge the onus which was upon it u/s. 68 of the Act - the addition was made solely based on the inadmissible and unreliable material and the addition made cannot be sustained - the addition of ₹ 2,00,00,000/- made in the case of M/s Charted Motors Pvt. Ltd. as well as addition of ₹ 70,00,000/- made in the case of M/s. Chartered Speed Private Limited is set aside – Decided in favour of assessee.
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