TMI Blog2014 (9) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... to show that the investment made by the share applicants actually emanated from the coffers of the assessee, so as to enable it to be treated as the undisclosed income of the assessee – revenue except making a vague statement that the managing directors have advanced monies to the alleged share applicants, did not substantiate the same with concrete evidence - the addition of subscriptions as unexplained credit u/s 68 of the Act is unwarranted - since the share applicants in are one and the same and they have confirmed the transactions, it cannot be treated as the unexplained investment of the managing directors of the company and on that score, no addition can be made in the hands of the managing directors – thus, the order of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a search and seizure action in the case of the assessees in T.C.(A) Nos.310 and 311 of 2014, namely, the Managing Directors of the Spinning Mill. A survey under Section 133A of the Income Tax Act (for brevity, the Act ) was conducted in the case of the assessee in T.C.(A) No.309 of 2014, namely the Spinning Mill. In the course of the survey operation, certain irregularities were noticed regarding investments in shares. In the course of the search in the case of the assessee in T.C.(A) No.310 of 2014, a list of 84 persons captioned as Directors Share Holders was seized. Similarly, in the case of the assessee in T.C.(A) No.311 of 2014, a list of 13 persons was seized. 2.3. The Assessing Officer opined that the transactions in shares are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent appeals are filed on substantial questions of law, referred to supra. 3. We have heard the learned Senior Standing Counsel appearing for the appellant and perused the orders passed by the Tribunal and the authorities below. 4. Before adverting to the merits of the case, it would be relevant to refer to Section 68 of the Act, which reads as under: Section 68. Cash credits.-Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directors have advanced monies to the alleged share applicants, did not substantiate the same with concrete evidence. Such finding based on a priori considerations cannot be a ground to make addition towards unexplained cash credit. Therefore, the addition of such subscriptions as unexplained credit under Section 68 of the Act is unwarranted. Moreover, since the share applicants in all these cases are one and the same and they have confirmed the transactions, it cannot be treated as the unexplained investment of the managing directors of the company and on that score, no addition can be made in the hands of the managing directors. 8. That apart, a reading of the decision of the Supreme Court in Lovely Exports (P) Ltd. case, referred sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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