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2017 (1) TMI 1621 - AT - Income TaxUnexplained cash credits u/s 68 - assessee failed to discharge the initial burden cast upon it by furnishing identity, genuineness of the transaction and creditworthiness of the parties - addition as subscribers have not responded to summons and also failed to file necessary evidence in support of source of income to prove the capacity of the creditor - Held that:- The Hon’ble Supreme Court, in the case of CIT Vs. Lovely Exports Pvt. Ltd. [2008 (1) TMI 575 - SUPREME COURT OF INDIA] held that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the assessing officer, then the department is free to proceed to re-open their individual assessments in accordance with law, but this amount of share application money cannot be regarded as undisclosed income u/s 68 of the assessee company. Therefore, we are of the view that once the assessee has furnished correct name and address of the subscribers to the share application money, it is for the department to re-open the assessment of individual subscribers to the share capital in accordance with law, but additions cannot be made u/s 68 of the Act as unexplained credits. In the present case, out of the total 20 subscribers to the share application money, two subscribers i.e. (1) Shri B. Maheshwar Goud and (2) Shri K. Shiva Kishore have denied investments in share application money. Shri B. Maheshwar Goud had given in writing that he had never made any investment in share application money of the company. Similarly, Shri K. Shiva Kishore also appeared before the A.O. and gave a statement that he never made any investment in the company. Therefore, we are of the view that wherever the subscribers have denied the investment in share application money, the A.O. was right in making additions towards unexplained credit u/s 68 of the Act. The CIT(A) without appreciating the facts, simply deleted additions made by the A.O. in total. Therefore, we uphold the additions made by the A.O. towards alleged bogus share application money in the case of Shri K. Shiva Kishore for the A.Y. 2006-07 and 2007-08 as unexplained cash credit u/s 68 - decided partly in favour of revenue
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