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2017 (9) TMI 304 - AT - Income TaxAddition in FDRs from cash received from directors - deemed dividend addition u/s 2(22)(e) - unexplained source of source of investment - Genuineness of transaction - whether sub creditor had the creditworthiness of making the investment? - Held that:- The second FDR of ₹ 4 crores was made in cash by the assessee company in CITI Bank, Gurgaon. The Ld. AR has referred to the ledger account in the books of M/s OEC Diascans Ltd. and the ledger account in the books of Mr. Harish Kanwar and Ms. Anjali Kanwar of M/s OEC Diascans Ltd which support the submissions made by the Ld. AR that the amount of ₹ 4 crores were received by the Directors Ms. Anjali Kanwar and Mr. Harish Kanwar from M/s OEC Diascans Ltd.The Department has not brought anything on record to dispute the aforesaid sequence of transactions. Moreover, the return of amount to the Directors and by the Directors to M/s OEC Diascans Ltd. is also evidenced by the bank statements and the certificate given by the bank to the Directors. This clearly shows that the transaction was genuine within the meaning of section 68 of the Act. Department had tried serving notice to M/s OEC Diascans Ltd. which remained un-served. However, the Department despite having the address of the changed company M/s Silver Sand Corporation did not make any enquiry with respect to the aforesaid transactions. The net worth of the company M/s Silver Sand Corporation Ltd. from its balance-sheet reveals that it is regularly filing its return of income and total sources of funds are ₹ 85.46 crores. The DIN and the address of the said company are also on record. The assessee had therefore, proved the genuineness, creditworthiness and identity as required under section 68 of the Act. The addition cannot be made in the hands of the assessee for not proving the source of source of investment and the assessee is not required to prove that the sub creditor had the creditworthiness of making the investment. - Decided in favour of assessee.
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