ITO Vs Amar Pratap Steels Pvt. Ltd. (ITAT Jaipur)
ITAT Jaipur held that addition towards unexplained cash credit under section 68 of the Income Tax Act merely based on retracted statement cannot be sustained. Accordingly, appeal of the revenue dismissed.
Facts- Revenue has preferred the present appeal mainly contesting that CIT(A) erred in deleting the addition made by the AO of Rs. 1,70,02,500/- on account of unexplained cash credit u/s 68 of the Act in respect of share application money received by the assessee during the year without appreciating the fact that the information was received from investigation wing after thorough verification wherein the identity and credit worthiness of the share applicants as well as the genuineness of the transactions were not proved.
Conclusion- It is very much clear from the provision of section 68 as prevailing for year under consideration the ld. AO can make addition u/s 68 only under two circumstances, (i) the assessee does not offer any explanation about nature and source of such credit or (ii) Explanation offered by Appellant is not up to the satisfaction of Ld. AO. Therefore, here we note that the assessee provided so as prove the identity, credit worthiness and genuineness of the transaction by placing all the records such as PAN, Application made for Shares, Board Resolution and Confirmations, Financial Statement and Bank statement of the investor company which were not at all doubted by ld. AO. But all such vital evidence has been ignored solely on the basis of statements of third party recorded by some other officials during the course of search operation conducted.
