Additions u/s 68 cannot be made merely because the affidavits filed by share subscribers were not attested by first class magistrate

 ITO Vs. Gay Loard Industries Ltd.

I.T.A. No. 2004/ Ahd/2008

(Assessment year- 1996- 97 )

Decided by- ITAT Ahemdabad

Decided on – 17^th June 2011

O R D E R

PER SHRI D. K. TYAGI, JM:

This is the revenue’s appeal filed against the order dated 14.03.2008 of CIT(A) VIII, Ahmedabad for the assessment year 1996- 97.   The revenue has raised the following grounds of appeal:

“1. The Ld.ClT(A) has erred in law and on the facts of the case in deleting the addition of Rs.95,22,3507-, in respect of increase in share capital.

5. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 6- It is, therefore, prayed that the order of the Ld. CIT(A) may be cancelled and that of the Assessing Officer may be restored to the above effect.

2. The brief facts of the case are that the original assessment was completed u/s 144 of the Act and thereafter the assessment order was set aside by the ITAT on the issue relating to addition on account of share capital, unsecured loan, dis allowance on depreciation, as well as claim u/s 80IA of the Act and were restored back to the file of the A.O. for fresh adjudication. Accordingly, fresh assessment proceedings were started by the A.O. The assessee was asked to furnish the complete details of addition in share capital along with name and full address of the person with confirmation, contra account, source of investment, their income tax assessment particulars, genuineness of investment by the promoters, shareholding portion of the assessee, copies of share application made by the person along with letter of allotment with ledger folio number, distinctive number of share certificate and copies of share certificates allotted etc. The assessee filed details before the A.O. and after taking into consideration of the details, the A.O. observed that the assessee had not furnished the details as required by him and, therefore, the genuineness of the claim could not be verified. The A.O. sent letters to the concerned parties u/s 133(6) of the Act for verifying the genuineness, in response to which only affidavits of the persons were filed by the assessee and the affidavits filed were only notarised but not sworn before any magistrate. These affidavits were drafted in a similar manner and the information given in the affidavit were gathered form the assessee itself and the representative investors did not have exact date and cheques numbers and the names of the bank. Therefore, A.O. did not accept the same and he concluded that the genuineness of investment made by the promoters of the company was not proved by the assessee by giving necessary evidence. Therefore, addition was made for increase in share capital under promoter quota of Rs. 95,22,350/-.