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TMI Blog2019 (5) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... 35 lacs under section 68 of the Income Tax Act 1961. 4. Briefly the facts on this issue are that assessee filed return of income declaring loss of Rs. 30,72,617/-. The assessee company has received Rs. 15 lacs as share application money from Shri Surendra Singh Yadav and Rs. 20 lacs from M/s. Wianxx Impex P. Ltd. No shares were allotted to both the above persons till 31st March 2006. The assessee company was required to prove identity, creditworthiness and genuineness of the transaction by filing the confirmations, copy of the income tax return and their bank statements. The assessee only filed bank statements. The assessee was, therefore, directed to produce Shri Surendra Singh Yadav for examination. It was also found that there are cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,084/- through cheque dated 28.10.2005 credited in his bank account against sale of agricultural land, but, the same have been ignored. Copy of the bank statement was filed to show that there were no cash deposit prior to making investment in assessee company. 4.3. Similarly, in the case of M/s. Wianxx Impex P. Ltd., assessee filed confirmation, affidavit, audited balance sheet, bank statement and list of the Directors. It was submitted that average bank balance appearing in their case was Rs. 1.75 crores and no cash have been deposited. 4.4. The submissions and documents filed by the assessee were forwarded to the A.O. for filing remand report. The A.O. recorded statement of Shri Surendra Singh Yadav in which he has stated that he was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Investor for purchase of shares. 5.1. Learned Counsel for the Assessee as regards other creditor M/s. Wianxx Impex P. Ltd., referred to confirmation filed by the creditor supported by affidavit and balance-sheet. He has submitted that bank statement would reveal that no cash have been deposited in the case of this Investor. He has, therefore, submitted that assessee had discharged the onus of proving identity of the Investors, their creditworthiness and genuineness of the transaction in the matter. The department cannot ask the assessee to prove the source of the source. 6. On the other hand, Ld. D.R. submitted that if the test of human probability is applied, it would prove that assessee failed to prove creditworthiness of the investo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remand proceedings and his statement have been recorded by the A.O. in which he has affirmed that his approximate annual income is of Rs. 2,50,000/- including salary income of Rs. 1,80,000/-. He has explained that investment in assessee company was made, out of sale of agricultural land which was under acquisition by State Government. He has further submitted that he worked with M/s. Innovative Tech Pack Ltd., and the owners/promoter of the said company offered him good return over a period of time, if the investor is interested in making investment in sister concern i.e., assessee company. The investor, therefore, made investment in assessee company. He has further submitted that shares were not allotted to him and amount have been later ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g is clarified whether any interest have been paid at the time of return of the money. No responsible person of the investor company was produced before A.O. for examining the genuineness of the transaction in the matter. The Ld. CIT(A) noted that though confirmation was filed before him, but, balance sheet of the investor company would show NIL investments in assessee company as on 31.03.2007. These facts clearly show that assessee failed to prove creditworthiness and genuineness of the transaction in the matter. The Hon'ble Supreme Court in the case of Durga Prasad More 82 ITR 540 (SC) and Sumati Dayal 214 ITR 801 (SC) have held that "Courts and Tribunals have to judge the evidence before them by applying the test of human probabilities." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its plant and machinery to the company/persons in which Directors of the assessee company are shareholders/interested. The transaction was found to be collusive and loss claimed in the revised computation of income filed during the course of assessment proceedings at Rs. 30,72,617/- was not accepted and income of assessee from the business was assessed at NIL income. This issue was considered in detail by Ld. CIT(A) and Ld. CIT(A) allowed depreciation to the assessee. 8.1. However, as regards the addition of Rs. 3,46,000/- in challenge in appeal on Ground Nos. 7 and 8, the Ld. CIT(A) noted that assessee submitted that out of expenses claimed at Rs. 4.66 lakhs, Rs. 3.46 lakhs was on repair of machine and balance amount on expenses on rent, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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