TMI Blog2017 (9) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... ot file requisite documents before the AO, as asked by him, as a result thereof the AO passed the exparte order u/s. 144/147 of the Act and therefore, did not verify the documents furnished by the Assessee and also not done the independent inquiry and verification. Therefore, Ld.CIT(A) in the interest of justice, think it proper to set aside the issue in dispute to the file of the AO to decide the same afresh, after making independent inquiry and verification, as deem fit. However, the Assessee is also directed to submit all the necessary documents, as asked by the AO during the assessment proceedings and fully cooperate with the AO and did not take any unnecessary adjournment. Accordingly, the issue in dispute is set aside to the file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.10.2001 declaring NIL income. The return of the assessee was processed u/sd. 143(1) of the Income Tax Act, 1961 (hereinafter referred as the Act) on 28.6.2002. Subsequently a notice u/s. 148 of the Act dated 31.3.2008 was issued. Finally, the reassessment order was completed on 26.12.2008 determining the total income at ₹ 71,49,221/- wherein the AO has made an addition of ₹ 71,76,750/- under section 68 of the Act. Against the assessment order, the assessee appealed before the Ld. CIT(A), who vide his impugned order dated 2.11.2010 has deleted the addition in dispute by partly allowing the appeal of the assessee. Aggrieved with the impugned order passed by the Ld. CIT(A), Revenue is in appeal before the Tribunal. 3. Ld. DR r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the facts on record. It is observed that the AO based his arguments purely on the basis of information from Investigation wing of the Income-tax Department, New Delhi. He has entirely relied upon such information for reaching such conclusion. The above information may be a sufficient ground to initiate reassessment proceedings of a case, but to make an addition the AO has to establish the fact of fraudulent nature of such transaction. Purely on surmises and conjectures no transaction can be held as bogus unless the same is proved on the basis of sound reasoning and evidence on the part of the AO before making the addition. When the assessee has furnished all necessary proof in support of its claim, it is all the more necessary to rebut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) of the Act, he has not used any of his powers to verify the genuineness of the claim of the assessee by verifying the documents furnished by it. If AO. had doubted the impugned transaction after receiving the evidences which had been produced by the assessee in support of its claim it was very much open to the A.O. to do his independent enquiry and verification. This has not been done by the A.O. Further, what is the desired documentary evidence required to support the claim of the assessee as required by the AO. is not coming out of the order of the A.O. The appellant has adduced the documentary evidences I support of the transaction in question. The identity of the purchaser of the shares was established as it was borne on the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure source is not found satisfactory, only then the amount so credited may be treated as income. Section 68 has come up for consideration before various High Courts which have held that the assessee has to prove three conditions (i) identity of the creditor (ii) Capacity of such creditor to advance money (iii) genuineness o~ the transaction. [Vide Shankar Industries v. CIT (1978) 114 ITR 689 (Cal.); C. Kant Company v. CIT (1980) 126 ITR 62 (Cal.); Prakash Textile Agency vs. CIT (1980) 121 ITR 890 (Cal.); Oriental Wire Industries Pvt. Ltd .. vs. CIT (1981) 131 ITR 688; CIT Vs. B.C. Mohanty (1995) 212 ITR 199(Ori.); lalan Timbers Vs. CIT (1997) 223 ITR 11 (Gau.) CIT vs. Korlay Trading Company Ltd. (1999) 232 ITR 820 (Cal.)]. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances, it is held that the addition of ₹ 71,76,750/- cannot be sustained and accordingly, the same is directed to be deleted. As a result, grounds of appeal no. 8 9 are allowed. 7. On going through the aforesaid findings of the Ld.CIT(A) as well as the finding of the Assessing Officer made in the assessment order, we find that AO has passed the assessment order 26.12.2008 u/s. 144/147 of the Income Tax Act, 1961 i.e. exparte qua assessee by holding that assessee has failed to give satisfactory explanation about the nature and source of the amount of ₹ 71,76,750/- credited in its bank accounts and discharge its onus of proving the genuineness of transactions and creditworthiness of the parties from whom the amount has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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