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2016 (12) TMI 1476 - AT - Income TaxAddition on sale of investment on the basis of suspicion - proof of identity - Held that:- We are of the opinion that mere furnishing of the confirmation of the parties, such as name, address and permanent account number does not prove the identity, creditworthiness, genuineness of the transaction where the assessing officer has got the information from the investigation wing and further the same were also corroborated by the bank statement obtained by the Ld. assessing officer from the bankers of the buyer companies where the cash was deposited of the identical amount on the same day and the cheques were issued to the assessee towards the purchase of those shares. Despite the opportunity given by the Ld. assessing officer to the assessee to produce the parties same could not be produced by the assessee because of the paucity of time as the assessee was asked to produce the parties on 13/12/2010 and merely within 14 days the assessment was framed on 27th /12 /2010. The assessment was framed by the the Ld. assessing officer because of the time barring limitation arriving for passing of the above said assessment order. In view of this we set aside the addition of ₹ 19.50 lakhs back to the file of the Ld. assessing officer and direct the assessee within 3 months of this order to produce the directors of the above company along with the requisite details such as the sources of funds deposited by those companies into the bank account in cash before issue of the cheques and the transaction price of purchase of shares of the companies to the satisfaction of the assessing officer to prove the identity, creditworthiness, and genuineness of the transaction of the sale of shares of futuristic Ltd by the assessee. - Decided in favour of assessee as directed Disallowance being 20% of the expenses - disallowance has been made by the Ld. assessing officer as the assessee has failed to produce the books of accounts with supporting bills and vouchers - Held that:- The assessee could not produce the books of accounts before the Ld. assessing officer and therefore the disallowance has been made by the Ld. assessing officer estimating 20% of the all the expenditure of the assessee including the opening stock as disallowable. The Ld. 1st appellate authority has reduced the above amount by the amount of opening stock, but confirmed the balance disallowance of expenditure. Such disallowances has resulted because the assessee could not produce the books of accounts before the Ld. assessing officer due to the death of one of the key directors. Therefore, assessee is granted one more opportunity to produce the books of accounts of the assessee before the Ld. assessing officer for verification of the above expenditure as estimated disallowance cannot be upheld, When the assessee is ready to produce the books of accounts. In the result ground No. 8 of the appeal of the assessee is set aside back to the file of the assessing officer with a direction to the assessee to produce the books of accounts along with all supporting vouchers and bills within three months of this order to satisfy the assessing officer about the genuineness of the claim of expenditure of the assessee.
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