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2023 (8) TMI 1017 - AT - Income TaxAddition u/s 68 - unexplained nature and source of the amount credited in its books of account - share application money received from the 40 investor companies - assessee company (NBFC) is primarily engaged in the business of providing unsecured loans/advances and trading in shares and securities - HELD THAT:- As per the "1st Proviso" to Section 68 of the Act an additional obligation was fastened upon the assessee company to substantiate the authenticity of its claim of having received genuine share application money, and the respective investors were required to offer an explanation as regards the nature and source of the sum so credited against their name in the books of account of the assessee company. To sum up, the claim of the assessee company of having received share application money from the 40 share applicant/subscriber companies did further cast an obligation upon it to mandatorily supplement the same with the explanations of the respective investor companies about the nature and source of such sum credited against their names in the books of account of the assessee company. In the present case before us, not only the assessee company had failed to substantiate to the hilt the nature and source of the amount credited in its books of account based on any clinching documentary evidence, but also, there is no whisper in the orders of the lower authorities about any explanation of the respective investor companies about the nature and source of such sum so credited against their names in the books of account of the assessee company. Because the assessee company had grossly failed to discharge the onus that was cast upon it as regards proving the authenticity of its claim of having raised genuine share application money of Rs. 121.88 crore (approx.) from the 40 investor companies, i.e., by satisfying the double facet conditions contemplated in the aforesaid statutory provision, i.e., Sec. 68 (post-amended), viz. (i) explanation about the nature and source of the credit in its books of account; and (ii) explanation by the investor companies as regards the nature and source of the sum so credited against their name in the books of account of the assessee company - therefore, no infirmity concluding that the entire amount as unexplained cash credit u/s. 68 of the Act, we uphold the same. Decided against assessee.
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