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2021 (12) TMI 701 - AT - Income TaxUnexplained cash credit u/s. 68 - assessee failed to establish any cash credits in the books of accounts - assessee received amount from accommodation entries and converted them from unaccounted money to accounted money - HELD THAT:- In the instant case, the credit is in the form of receipt of share capital from share applicants. The nature of receipt towards share capital is seen from the entries passed in the respective balance sheets of the companies as share capital and investments. In respect of source of credit, the assessee has to prove the three necessary ingredients i.e. identity of share applicants, genuineness of transactions and creditworthiness of share applicants. For proving the identity of share applicants, the assessee furnished the name, address, PAN of share applicants together with the copies of balance sheets and Income Tax Returns. With regard to the creditworthiness of share applicants, we noted that these Companies are having capital and reserves and the investment made in the assessee company is only a small part of their capital. These transactions are also duly reflected in the balance sheets of the share applicants, so creditworthiness is proved. Even if there was any doubt if any regarding the creditworthiness of the share applicants was still subsisting, then AO should have made enquiries from the AO of the share subscribers. In the facts and circumstances of the case as discussed above, no addition is warranted under Section 68 - Decided in favour of assessee.
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