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2018 (10) TMI 490 - AT - Income TaxAddition u/s 68 - person has not appeared in compliance to notice u/s 131 - Held that:- The Hon’ble Supreme Court in the case of Commissioner of Income Tax vs. Orissa Corporation Pvt. Ltd. [1986 (3) TMI 3 - SUPREME COURT] and Commissioner of Income Tax v. Orchid Industries Pvt. Ltd. [2017 (7) TMI 613 - BOMBAY HIGH COURT] have held that an addition cannot be made simply because a person has not appeared in compliance to notice u/s 131 of the Act, when all the other requirements of the notices u/s 133(6) of the Act, has been complied with AO has simply disbelieved the evidence filed by the assessee. He has not conducted any verification, let alone investigation, before coming to the conclusion that the confirmations and evidence filed by the Directors cannot be admitted as evidence. As the share applicants are the Directors of the assessee Company and have confirmed the transactions and have also filed their source of funds for the investment. When statement of final accounts were filed giving sources of funds for making the investment, the Assessing Officer has not given any reason as to why he is not able to accept the same. If at all the creditworthiness of the directors is not proved, then an addition can be made only in their hands and not in the hands of the company as held by the Hon’ble A.P. High Court in the case of Lanco Industries Ltd. (1999 (12) TMI 45 - ANDHRA PRADESH HIGH COURT). No contrary evidence to controvert the evidence produced by the assessee, is brought on record. Simply because the directors/shareholders did not present themselves before the Assessing Officer, an addition u/s 68 cannot be made. - Decided in favour of assessee
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