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2021 (5) TMI 570 - AT - Income TaxAddition u/s 68 - onus to prove the identity, creditworthiness and genuineness of the share applicants - as per revenue assessee fails to explain the nature and source shall be assessed as its undisclosed income - HELD THAT:- Onus shifted to AO to disprove the documents furnished by assessee; and further the AO could not have brushed aside the documents produced by assessee/share subscribers without pointing out any infirmities; and without doing this exercise, the AO could not have drawn adverse view against the share subscribers and therefore, for the same reasons the impugned action of Ld CIT(A) to sustain the addition also cannot be countenanced because the very same exercise the Ld CIT(A) could have resorted to exercising his co-terminus powers, which he did not do. In the absence of any fruitful investigation, much less gathering of evidence by the Assessing Officer/Ld CIT(A), we are of the opinion that addition could not have been sustained merely based on inferences drawn by circumstance/conjectures/surmises. Both the nature & source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments, confirmation of source of source and fourteen (14) share subscribers scrutiny assessments passed u/s 143(3) out of twenty one (21) share subscribers were placed on AO/Ld CIT(A)'s record. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction were placed before the AO/Ld CIT(A) and the onus shifted to AO/Ld CIT(A) to disprove the materials placed before him. Without doing so, the addition made by the AO and sustained by Ld CIT(A) was based on conjectures and surmises, so it cannot be justified. In the facts and circumstances of the case as discussed above, no addition was sustainable under Section 68 of the Act. Therefore, the impugned order of Ld. CIT(A) is set aside and the AO is directed to delete the addition and consequently the appeal of assessee stands allowed.
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