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2022 (1) TMI 784 - AT - Income TaxAddition u/s 68 - assessee has received share application money as unexplained - HELD THAT:- AO has demonstrated that all the capital introduced in the capital account of share applicants are of non-verifiable nature; credit-worthiness of Shri Sanjay Gupta is very much doubtful; most of the amounts were from unknown sources. AO has rightly assumed that the transaction is not genuine rather rooted through unsecured loans etc. whose confirmation could not be filed. We find that though the assessee had provided identity of the giver of the funds, but onus to prove creditworthiness and genuineness of transaction beyond doubt have not been discharged by the assessee. Law on this issue on this point is clear. It is necessary for the assessee to prove prima facie, three aspects of the transaction which generated funds in the form of share application money. Section 68 provides three aspects to prove the case of cash credit such as proof of the identity of this creditor, the capacity of such creditor to advance the money and, genuineness of the transaction, and if these aspects are proved by the assessee, then burden shifts to the Department to prove otherwise. In the instant case, assessee has only established identity of the creditor, credit-worthiness and genuineness of the transaction with the assessee have come under serious cloud, and gave rise to reasonable belief in the mind of the AO that the assessee has indulged in a dubious transaction to launder its undisclosed income. Therefore, in our view, it is a fit case where provisions of section 68 of the Act should be invoked, which the ld.AO has rightly done so - No infirmity in the impugned order of the AO, more so, in view of the reasoning given in the remand report submitted by the assessee before the ld.CIT(A). Accordingly, action of the ld.AO in invoking provisions of section 68 is upheld, and the addition deleted by the ld.CIT(A) is set aside, and order of the AO on this issue restored. Accordingly, this ground of Revenue is allowed. Disallowance of sundry creditors - CIT(A) has restricted the impugned addition on the basis of the remand report filed by the AO and also based confirmations and other details filed during the remand proceedings as well as before the appellate proceedings - HELD THAT:- We find that the ld.CIT(A) has examined this issue in detail, such as details submitted by the assessee and remand report by the AO, and after giving well reasoned findings restricted the impugned addition. Therefore no interference from our side is called for on this issue, which we uphold, and reject the ground of appeal of the Revenue.
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