2021 (2) TMI 735 - AT - Income Tax

Addition u/s 68 - search & seizure operation under section 132 - substantial increase in the share capital and introduction of share premium during the year under consideration - HELD THAT:- Assessee produced sufficient documentary evidences before A.O. to prove the ingredients of Section 68 - A.O. did not make any further enquiry on the documents filed by the assessee and also did not make any inquiry from the Investors directly or indirectly.

A.O. failed to conduct scrutiny of the documents at assessment stage and merely suspected the transaction between the Investors and the assessee. A.O. has also not brought any evidence on record that even if the share applicants did not have the means to make the investments, the investments made by them actually emanated from the coffers of the assessee so as to enable it to be treated as undisclosed income of the assessee. Assessee discharged its initial onus to prove the identity of the Investors, their creditworthiness and genuineness of the transaction in the matter. The Ld. CIT(A), therefore, rightly deleted the part addition in respect of 26 creditors with reference to the present Departmental Appeal. - Decided in favour of assessee.