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2018 (10) TMI 1651 - AT - Income TaxAddition u/s 68 - unexplained deposits of money from unknown sources - identity and creditworthiness of the share applicant as well as the genuineness of the transaction - as per assessee payments made to parties covered u/s 40A(2) - HELD THAT:- We find that the assessee has made a disclosure in its ‘Notes to Accounts’ and Form No. 3CD, the details of payments made to parties covered u/s 40A(2) of the Act. Therefore, the observation of the AO that “from the details brought on record in respect of BCPL, it is seen that it is apparently associate/group concern of the assessee company” is misplaced. In the instant case the AO failed to examine the reply filed by the assessee whcih explains the identity, capacity of the investor and genuineness of the transaction. The share application money was received by the assessee by account payee cheques through regular banking channels. it is well-settled that in order to discharge the onus, the assessee must prove (i) the identity of the creditor,(ii) the capacity of the creditor to advance money; and (iii) the genuineness of the transaction. After the assessee has adduced evidence to establish prima facie the aforesaid, the onus shifts to the department but we find that the AO has failed in the instant case to find fault with the submissions made by the assessee. The AO could have made investigations to find out the truth of the case. On the other hand, the AO has resorted to general propositions. AO has failed to draw any adverse conclusion on the basis of material evidence that the receipt of cash credit of ₹ 2,44,50,000/- from BCPL is not a genuine one. - Decided in favour of assessee.
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