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2021 (5) TMI 540 - AT - Income TaxAddition u/s 68 - assessee company received share capital and share premium as unexplained - assessee unable to prove the identity, genuineness and credit worthiness of the subscribers - HELD THAT:- We find that the entire share capital and premium has been received through account payee cheques drawn on the account of shareholders who are all independent assessees and have confirmed the transaction of having made investments in the assessee company and have also filed their respective bank accounts and have explained the nature and source of funds in their bank account out of which share subscription including premium has been paid to the assessee company. These evidences cannot be brushed aside lightly and preponderance of human probability cannot get precedence over these evidences galore. AO has not doubted the share premium of ₹ 490/- per share as the same is supported by the valuation report as per the I.T. Rules. By disbelieving the source of source being long term capital gain from the sale consideration of shares of Shital Leasing and Finance Ltd and Shilpi Cable Technologies, the AO cannot justify the addition in the hands of the assessee company. As mentioned elsewhere, any addition which deserved to be made should have been made in the hands of the share applicants who have shown their source of source as sale of shares of these companies or alleged accommodation entries. Whether the assessee has discharged the burden cast upon it by the provisions of section 68 of the Act or not is purely a question of fact and has to be decided on the facts of each case and, therefore, no judicial decision has been considered on the peculiar facts of the case in hand. Additions made by the AO on the basis of general observations and without drawing any adverse inference in the hands of the individual taxpayers [share applicants] such additions based on surmises and conjectures cannot be sustained. - Decided in favour of assessee.
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