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2021 (7) TMI 583 - AT - Income TaxAddition u/s 68 - share application money received from 6 different companies unexplained - CIT-A has deleted the addition made on the details submitted by the assessee of the records of the registrar of Companies of the share applicant, permanent account number and income tax jurisdiction of the share applicant company, the bank statement as well as the acknowledgement of the latest income tax return - HELD THAT:- CIT - A did not mention what further investigation the learned assessing officer could have carried out when neither the assessee could produce any of the directors, nor the director of the assessee company remained present before the AO. Further the respective summons issued twice by the learned assessing officer returned unserved and definition of Inspector also proved that no such company existed at that assessee given by the assessee. Assessee did not give any other address of the shareholders. The financial position of the share applicant was also shaky and lacked any credence. It was also unfair therefore the learned CIT – A to note that just because the creditors/share applicants could not be found at the address given it would not give the revenue are right to invoke Section 68 without any additional material to support such a move. In fact the learned assessing officer has done what could have been done. CIT – A was further stated by the fact that the money is received by cheque and transmitted through banking channels the genuineness of the transaction stands proved. We are sorry to state that all such transactions are only through banking channels. Merely because the transactions are carried out through banking channels the creditworthiness of the parties as well as the genuineness of the transaction does not prove at all. The learned CIT – A further stated that offer of the sum to be taxed by the learned authorised representative who only appeared before the assessing officer could not be the reason for making the addition. He plainly overlooked the fact that the learned assessing officer has not accepted the surrendered made by the learned authorised representative but has made the addition solely on the basis of the material produced by the assessee and failure of the assessee to produce the directors of the shareholders before him not only once but on many occasions. Even the director of the assessee company was not produced. The learned CIT – A did not utter a word in his whole order that what would be the reason for surrender of the sum by the assessee and forfeiture of the share application money immediately in the succeeding year. Therefore we completely agree with the argument of the learned departmental representative that the order of the learned CIT – A does not have any legs to stand. None of the judicial precedents cited before the learned CIT – A applies to the facts of the case. In view of this we reverse the order of the learned CIT – A relating the addition made by the learned assessing officer u/s 68 of the income tax act and restore the order of the learned assessing officer. - Decided against assessee.
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