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2022 (4) TMI 736 - AT - Income TaxUnexplained cash credit under section 68 - As per AO mere transactions carried out through the banking channel does not imply ipso facto as genuine transaction - HELD THAT:- With respect to the identity of the party, we find that the assessee has furnished the details such as copy of ledger account, bank statements, PAN. From the above, there remains no doubt that the identity of the investor parties is not in disputed, as it has been proved beyond doubt. With respect to the genuineness of transaction undisputed fact that the amount of share application money received by the assessee was refunded to the parties. It implies that the assessee was not the beneficiary of the amount received by it as alleged by the AO. Though the share application money has been repaid by the assessee in the subsequent year, but it is difficult to hold that the assessee was the ultimate beneficiary of the impugned amount. Thus, we can assume that the impugned transaction was the genuine transactions between the assessee and the parties. CIT (A) has given categorical finding that there was assessment framed in case of all three parties for the year under consideration where additions were made. This fact cannot be brushed aside merely on the ground that the investor were not produced by the assessee during the assessment proceedings. It was the revenue which wanted to verify the investors. For this purpose, lot of powers were available with the revenue such as issuing notice under Section 131 of the Act for inviting the personal attendance of the parties. But the AO has not exercised such power in the given facts and circumstances. Thus we are of the opinion that, though the transactions of the share application money received by the assessee received without proper share application form or written correspondence may raise doubt but in either of the case, once application money is returned back, which has been established based on the documentary evidence, the credit entries cannot be looked into in isolation after ignoring the debit entries despite the debit entries were carried out in the later years. Thus, in the given facts and circumstances, we hold that there is no infirmity in the order of the Ld. CIT-A. Hence, the ground of appeal of the revenue is hereby dismissed. Addition u/s 68 - loans and advances - HELD THAT:- There remains no ambiguity that amount of ₹ 5 crore each received from Shri Ramesh Thakor and Shri Vinod Sharma represent repayment of advances given by the assessee in the month of February 2009. Therefore the provision of section 68 will not be applicable on this transaction. Hence the ground of appeal of the Revenue is hereby dismissed.
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