2023 (5) TMI 1040 - AT - Income Tax

Unexplained cash credit u/s 68 - share capital received from 22 shareholders - addition made on non discharge of onus in establishing identity, genuineness and creditworthiness of the share applicants - HELD THAT:- All the 22 share applicants and their source firms independently responded to the notices u/s 133(6) issued to them and provided the desired information to the AO.

AO brought no evidence on record to support his baseless allegations which are mere conjectural and hypothetical that share capital introduced in the Assessee Company is unaccounted income/money of the Assessee Company.

There was no allegation of share capital issued at unreasonable share price or excessive share premium and there was also no allegation of any cash deposit prior to payment of share capital in the bank statements of the share applicants or the source firms.

If the AO had any doubt then he could have made further inquiries and issued summons u/s 131 to the share applicants and their source firms but he did not do.

Assessee Company has discharged its onus in establishing identity, genuineness and creditworthiness of the share applicants and all the amounts have been emanated from three entities namely, M/s. Shree Ram Enterprises, M/s. Shubh Laxmi Tex and M/s. Shree Amarnath Synthetics. The same has been confirmed by the shareholders as well as the Directors of all the three entities. Hence, we hold that the addition made by the AO has rightly been deleted by the ld. CIT(A). The order of the ld. CIT(A) is affirmed. Decided against revenue.