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2015 (5) TMI 473 - AT - Income TaxAddition u/s 68 - genuineness of investments - cash credit - Held that:- In the present case, the assessee is a loss making company and assessee has not been able to establish as to why an ordinary person of even having little prudence will invest in such a company. As regards, creditworthiness, Ld. CIT(A) has not made any finding as to what were the earnings of these companies and what were the net owned funds. Ld. CIT(A) stressed compliance only of one ingredient and that is identity of shareholders and the other two essential ingredients such as genuineness of transaction and creditworthiness of shareholders has been ignored. Moreover, there is certain set pattern of entries in the bank accounts of alleged shareholders whereby before issuance of cheques, the share applicants had got deposits almost equivalent amounts in their bank accounts. Moreover, the fact remained that A.O. had the information that the share applicants were engaged in the business of providing accommodation entries and therefore, the ratio of Nova Promoters and Finlease 342 ITR 169 is squarely applicable in this case. Therefore, in the absence of proper explanation of credits, the only option available with the A.O. was to make addition u/s 68 of the Act. The assessee cannot be allowed relief simply holding that assessee had discharged its onus by filing certain documents and the A.O. had failed to take further action. As decided in CIT v/s M/s Jansampark Advertising And Marketing (p) ltd. [2015 (3) TMI 410 - DELHI HIGH COURT] where A.O. has failed to discharge his obligation to conduct proper inquiry to make additions the Ld. CIT(A) could not have closed the chapter by simply allowing the appeal and deleting the addition relying upon certain case laws and ignoring the facts that no documents for establishing creditworthiness of alleged shareholders were filed and income tax returns also related to earlier years. In view of above facts and circumstances, we set aside the issue to the office of Ld. CIT(A) who should pass a well reasoned and speaking order based upon the facts of the case after affording reasonable opportunity of being heard to the assessee. - Decided in favour of revenue for statistical purposes.
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