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2021 (6) TMI 936 - AT - Income TaxAddition u/s 68 - Bogus share capital and share premium amount received - Addition on no proof to the identity, creditworthiness and genuineness of share capital/ share premium - main plank on which the AO made the addition was because the directors of the share subscribers did not turn up before him - HELD THAT:- Hon'ble Apex Court in the case of Orissa Corpn. (P) Ltd. [1986 (3) TMI 3 - SUPREME COURT] and Rohini Builders[2001 (3) TMI 9 - GUJARAT HIGH COURT] has held that onus of the assessee (in whose books of account credit appears) stands fully discharged if the identity of the creditor is established and actual receipt of money from such creditor is proved. In case, the Assessing Officer is dissatisfied about the source of cash deposited in the bank accounts of the creditors, the proper course would be to assess such credit in the hands of the creditor (after making due enquiries from such creditor). When a question as to the creditworthiness of a creditor is to be adjudicated and if the creditor is an Income Tax assessee, it is now well settled by the decision of the Calcutta High Court in M/S. DATAWARE PRIVATE LIMITED [2011 (9) TMI 175 - CALCUTTA HIGH COURT] that the creditworthiness of the creditor cannot be disputed by the AO of the assessee but the AO of the creditor. Section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source shall be assessed as its undisclosed income. In the facts of the present case, both the nature and source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO's record. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO is based on conjectures and surmises, cannot be justified - no addition was warranted under Section 68 of the Act. Therefore, we delete the addition made - Decided in favour of assessee.
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