TMI Blog2015 (4) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... il. The assessee has contended that it was incorporated just before the end of the financial year. However, the assessee had to necessarily show that the amount which it indicated as borrowed from the six applicants in fact belonged to them. It is not sufficient for the assessee to just raise such contentions on the basis of certain observations of the CIT (Appeals) in this regard. The creditworthiness of the share applicants had to be seen in the context of the assertion made by them or the materials presented before the AO at the relevant time. The materials on record disclosed that some information from at least two individuals indicated that the money had not been given by them. In view of the fact that concurrently the lower authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT (Appeals) who recorded as follows: The appellant has thus been unable to explain the identity, genuineness and creditworthiness of the persons who have allegedly made the investment. As the explanation offered by the assessee about the nature and source of the sums found credited in the books was not satisfactory there was, prima facie, evidence against the assessee, viz., the receipt of money. The burden was on the assessee to rebut the same, and, he failed to rebut it, it can therefore be held against the assessee that it was a receipt of an income nature. The appellant has failed to discharge its onus to produce legally acceptable evidence of creditworthiness of the donor. The expression the assessee offers no explanation me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (Appeals). Learned counsel for the assessee contends that given the CIT (Appeals) s order which expressly recognized that the sum of ₹ 24 lakhs in fact emanated from the directors of the share applicants, it could not be said that requirement of Section 68 of the Act is not discharged. He relied upon the decision of Supreme Court in CIT vs. Bharat Engineering and Construction 83 ITR 187, especially the following observations: 2. The assessee-company is an engineering construction company. It commenced business in May, 1943. In their account books, there are several cash credit entries in the first year of its business. We are concerned with only five of those cash credit entries. On June 1, 1943, there is a cash credit entry of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Officer may assume that cash credit entries in its books represent income from undisclosed sources. But what inference should be drawn from the facts proved is a question of fact and the Tribunal's finding on that question is final. 4. Learned counsel also relied upon CIT vs. P.K.Noorjahan 237 ITR 570 and submitted that besides, four High Courts decision apply the ruling in Bharat Engineering (supra). 5. As to the statutory requirement of Section 68 of the Income Tax Act, the Supreme Court in Lovely Exports 216 ITR 195 stated as follows: Can the amount of share money be regarded as undisclosed income under Section 68 of Income Tax Act, 1961? We find no merit in this Special Leave Petition for the simple reason that if the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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