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2019 (5) TMI 1117 - AT - Income TaxAddition u/s. 68 - unexplained investment in share capital and cash deposit - explanation to immediate source of the cash deposits - admission of additional evidence - search u/s 132 - assessee has made a specific request to the AO to allow time to furnish these details, which was denied - admission of additional evidences in the form of names, addresses, copies of acknowledgement of ITRs, confirmations of accounts of investors - HELD THAT:- AO without conducting enquiries to establish otherwise, made the addition for non-compliance in technical manner cannot be sustained in the interest of justice. Over and above, most of the investors are assessed to the income tax at the same place where the AO could have very easily invoked such enquiry, if he had any serious doubts about the genuineness of transactions. This could have been done either by the summons u/s 131 or even by deputing Inspector, which was not done. These facts have not been controverted by the ld. DR. Once the details have been provided by the assessee during the appellate proceedings before the ld. CIT(A) which are also provided to the AO to verify the same. AO was duty bound to invoke the necessary enquiry by way of issuance of summons u/s 131 of the Act or by way of deputing an Inspector which he fails to do so. Investors are regularly assessed to income tax and investments are not disputed and as such investments made by them are not disputed in their respective cases. The addition so made by the AO is not sustainable as rightly deleted by the ld. CIT(A), following the decision of CIT vs. Venkateshwar Ispat P. Ltd. [2009 (5) TMI 290 - CHHATTISGARH HIGH COURT] Unexplained cash deposits in bank account - CIT(A) has stated that the assessee has filed copy of banks statements, cash books, audited balance sheet with the relevant schedule for the relevant periods to establish the opening cash balances as an additional evidence on which the AO again did not issue any enquiries and hence ld. CIT(A) has admitted the same as an additional evidence under Rule 46A of the Rules after affording due opportunity to the AO. CIT(A) has observed that the cash deposits have been made out of the cash balance available with the assessee as on the date of deposits. CIT(A) has made specific observation regarding the cash deposits as being made out of cash balance available with the assessee before the date of deposits duly supported by the fact that the assessee has withdrawn from the same bank account and it was lying with him as unutilized which was re-deposited subsequently. Thus, the immediate source of the cash deposits stands explained and no adverse inference could be drawn in this context. We are of the considered opinion that the ld. CIT(A) is correct in holding that the Assessing Officer has made the addition in technical manner. - Decided in favour of assessee.
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