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2019 (11) TMI 148 - AT - Income TaxAddition of share capital u/s 68 - HELD THAT:- Assessee produced sufficient documentary evidences before the A.O. to prove that money routed from the assessee itself which came back to the assessee in the form of share capital/premium, therefore, assessee proved identity of the Investors, their creditworthiness and genuineness of the transaction in the matter and as such have been able to prove ingredients of Section 68 - A.O. however did not make any further enquiry on the documentary evidences filed by the assessee. A.O. did not verify the trail of the source of funds received by assessee through various entities as explained above. We may also note that during the course of hearing of these appeals, A.O. was present in the Court, but, did not make any adverse comment upon the documentary evidences filed in the paper book filed by the assessee. A.O. thus, failed to conduct scrutiny of the documents at assessment stage and merely suspected the transaction between the Investor Companies and the assessee company despite the fact that in the deviation report the A.O. expressed doubts in making addition into the matter. It may also be noted here that no cash have been reported to have been deposited in the accounts of the assessee, the Investor Companies and other related parties. We are of the view that assessee has been able to prove that it has received genuine amounts which is routed through various companies. Therefore, there was no justification to make any addition under section 68. There is no evidence on record that assessee paid any amount on account of commission for arranging any transaction because it was a genuine transaction between the parties. Therefore, there is no justification to make the addition under section 69C of the I.T. Act as well. In view of the above, we set aside the Orders of the authorities below and delete the entire additions in all the assessment years under appeals Addition on account of the bogus purchases out of books sales and suppressed profit - HELD THAT:- The books of accounts were duly audited as per the companies act and as per the income tax act. No defects in such books were found either by the learned assessing officer or by the learned CIT–A. Based on the information furnished by the assessee the learned assessing officer proceeded to make an addition at the rate of 25% of such purchases without conducting any enquiry. In the deviation proceedings, the learned assessing officer after scrutiny of the books of accounts, appraisal report and statement of the managing director of the company, which was retracted, held that no such addition should have been made. In the remand proceedings, also the AO held that on enquiry also made on test check basis of the 50% of the items got confirmed - on perusal of the deviation report and appraisal report that 4 the concluded assessment is no incriminating evidences were found. 25% of the purchases from the alleged bogus parties without finding any evidence and ignoring the sales paid by them to the assessee. Further, the learned CIT–A applied the provisions of section 145 (3) of the income tax act by rejecting the books of accounts of the assessee partially, without even looking at the books of accounts is also incorrect. In view of this the addition made by the learned assessing officer for all those years on account of bogus purchases deserves to be deleted for concluded assessment as well as pending assessments. Addition u/s 68 on account of cash deposited in banks post demonetization - HELD THAT:- As per retraction letter dated 24/3/2017 of the managing director of the company which was submitted on 31/3/2017 where assessee has revised its disclosure from INR 50 crores to INR 30 crores under PMGKY. There is no whisper of further recording the statement of the managing director to show how the original disclosure was incorrect. In fact, revenue accepted the revised disclosure made by the managing director. In view of above facts the additions sustained by the learned CIT–A of INR 73.13 crores are deleted thus ground number 5 of the appeal of the assessee for assessment year 2017–18 is allowed.
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