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2016 (5) TMI 43 - AT - Income TaxAddition u/s 68 - subscription of share capital received during the year - Revenue contended that assessee had not produced the directors of the company, that SEBI had made enquiries in the case of RGTPL, HTCPL and YVJL, that they were found to be indulged in price rigging - Held that:- We find that the assessee had filed copies of income tax returns, directors reports, confirmations and affidavits of the directors of all the three subscribers. Thus, it had discharged the burden of proof cast upon it. However, the AO ignored these evidences and did not make any further enquiries. It is surprising that in spite of clear direction of the FAA, he chose not to examine the evidences produced by the assessee. The FAA had given a clear finding of fact that there was no evidence of deposit of cash in the bank accounts of the subscriber at the time of issuing cheques to the assessee for allotting shares. The AO has ignored the fact that the net worth of all the three subscribers was approximately ₹ 2. 00 crores, that the transactions were carried out through banking channels. It is found that the AO did not make any enquiries with the subscribers about the investments made by them. The FAA has mentioned that the incidence of price rigging took place in the month of December of the succeeding year whereas the subscription was made in earlier year. Thus, it could not be said that assessee had routed its unaccounted money through the subscribers. In our opinion, assessee had discharged its onus in proving the identity of the creditor as well as creditworthiness of the subscribers and genuineness of the transactions. In these circumstances, we are of the opinion that the order of the FAA does not suffer from any legal or factual infirmity. The AO had not made any enquiries to substantiate his stand. Considering the above, we uphold the order of the FAA and decide the effective ground of appeal against the AO.
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