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2019 (6) TMI 1253 - AT - Income TaxAddition of unexplained credit u/s 68 - loans was taken long before the start of any activities by assessee - assessee submitted complete details such as income tax return, Annual report , bank account, confirmation of the above lender lender has net worth of ₹ 8.18 cores as share capital and reserves and surpluses - onus of proof - applicability of 68 on charitable institution - HELD THAT:- It is very strange that assessee could not produce the party for examination before ld AO, made no attempt to produce them before CIT (A), but found it convenient to make repayment of the loan by account payee cheque after passing of the assessment order but before the appeal disposed off by the ld CIT (A). The lender is a private limited company and is an artificial juridical entity; it functions through its directors. The directors whereabouts are not known, the company’s address shows that it never existed at that address. Mere filing of the paper does not establish even the identity of the lender company. The depositors is a private limited company which has existed and carried out the activities therefore, its directors who are not found at the given address and further even they did not respond to the summons. The assessee could not produce them before the lower authorities and in case of some other assessee also it itself proves that the lender is nonexistent shell company. The lenders which has an asset base of ₹ 8.18 crores has earned a meager income of ₹ 37000/- and the income tax payable for Assessment Year 2009-10 is a meager sum of ₹ 108/- and ₹ 11739/- for the current year. Further this company does not have a fixed asset of single rupee. Further, the balance sheet produced before the lower authorities was also not accompanied with the schedules and the profit and loss account but a stray paper giving the list of various loans and advances etc was given . Further the bank account of the lender which is given for 9/1/2009 to 12/1/2009 to the AO does not show the name of the bank to which it pertains to similarly bank statement for repayment period was also 18/2/2010 to 05/3/2010 has the similar story to tell. The above conduct and the balance sheet of the lender clearly shows that the lender alleged to have deployed funds are non income producing funds, it does not result into any revenue to that company. The lender clearly is a paper company and nothing more than that. The lower authorities have correctly appreciated the whole transaction and confirmed the addition. In the present case the assessee failed to discharge its initial onus as cast upon it u/s 68 of the Act. The assessee was asked to produce the director which was found to be not traceable at the given address and further the assessee has also not produced the complete balance sheet. In the present case, the addition has been made correctly u/s 68 and same also applies to the AOP to whom the provisions of section 11 and 12 applies, if the impugned some was not credited to the income and expenditure account but is shown as a liability. The issue before us is also squarely covered by the Decision of Honourable Supreme court in case of Pr. CIT V NRA iron & Steel Co Ltd [2019 (3) TMI 323 - SUPREME COURT] and Honourable Delhi High court in Pr. CIT V v. NDR PROMOTERS PVT. LTD. [2019 (1) TMI 1089 - DELHI HIGH COURT] . - appeal of the assessee is dismissed
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