Receipt of share capital with higher premium cannot be added as unexplained credit on mere suspicion

ITO Vs M/s Anjali Millenium Tours Travels Pvt. Ltd. (ITAT Mumbai)

Conclusion:  AO, having accepted the fact that identity of subscribers had been proved, could not have proceeded to make addition only on the basis of charging higher premium, because charging higher premium on issue of shares was a decision between parties and AO would not have any role to play as long as genuineness of transaction was not in doubt. Therefore, addition on mere suspicion under section 68 could not be sustained.

Held: AO had made addition under section 68 towards share capital received from 5 companies, basically on the ground that although identity of subscribers had been proved, but the transaction between parties did not pass the test of genuineness as assessee had not justified charging of higher premium on shares without there being any corresponding business activity to justify projections and estimates relied upon for arriving at a share premium. It was held assessee had filed complete details in respect of 5 parties including their names and addresses, PAN, income-tax returns, copies of financial statements, bank statements, letter of allotment, etc. In fact all 5 parties had replied to notices issued u/s 133(6) alongwith whatever details sought by the AO. AO failed to make out a case of credit, which fell within the ambit of provisions of section 68, except doubting genuineness of transactions on suspicion and surmise only for the reason of charging higher premium on shares. Once assessee discharged its initial burden cast upon under 68 by filing necessary evidences, then the burden shifted to AO to prove otherwise. In this case, the AO, except doubting genuineness of transaction for charging higher premium on shares, did not bring on record any other evidence to disprove the voluminous evidences filed by assessee in respect of 5 companies to prove identity and genuineness of transactions. In fact, assessee had filed complete set of documents for all 5 subscribers. The parties have responded to notices u/s 133(6) by filing necessary evidences. Therefore, merely for the reason that the parties did not appear before AO or the assessee could not produce the parties in person before AO, the whole set of documents produced to prove the identity and genuineness of transactions, could not be disregarded. When  AO did not have anything more than suspicion in his possession to doubt the transactions, he erred in bringing to tax share capital received from 5 companies u/s 68  as unexplained credit.

FULL TEXT OF THE ITAT JUDGEMENT

This appeal filed by the Revenue is directed against the order of Ld. CIT(Appeal)- 16, Mumbai, dated 30/05/2017 and it pertains to AY 2012/13. The Revenue has raised the following grounds of appeal:-

“1. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition made of Rs. 1,50,00,000/- u/s 68 of the Act, without appreciating the fact that the assessee is during the course of assessment proceedings failed to produce share holders from whom share premium was received.

2. Whether in the facts and circumstances of the case and in law, the ld.CIT(A) was justified in holding that identity, creditworthiness and genuineness of the investor companies stand proved only on the basis of documentary evidence produced.

3. Whether in the facts and circumstances of the case and in law, the ld. CIT(A) was justified in deleing the addition without appreciating the true nature of arrangements & ignoring the decision of Hon’b!e Supreme Court in the case of CIT vs P. Mohankala (2007)291 lTR 278.”

2. The brief facts of the case are that the assessee company is engaged in the business of tours and travels, filed its return of income for AY 2012-13 on 08-12-2012 declaring loss of Rs.38,445. The case was selected for scrutiny and notices u/s 143(2) and 142(1) of the Act, were issued and served on the assessee. In response, the authorised representative of the assessee appeared from time to time and furnished various details, as called for. During the course of assessment proceedings, AO noticed that assessee has issued fresh share capital amounting to Rs,1.5 crores with a huge premium of Rs.990 per share for shares having face value of Rs.10 each. Therefore, in order to ascertain the correctness and genuineness of share capital, called upon the assessee to file complete details of subscribers to the share capital along with confirmation letters, etc. In response to notice, the assessee, vide its letter dated 11-02-2015 and 27-02-2015 submitted certain details including copy of bank statement, copy of ITR acknowledgement alongwith financial statements, copy of annual return and other details. In order to verify correctness of claim, the AO issued notice u/s 133(6) to 5 parties from whom the assessee stated to have received share capital and asked them to file certain evidences. In response, all 5 parties replied to notices issued u/s 133(6) and filed various details as called for by the AO. The assessee also filed a valuation report justifying charging premium of Rs.990 per share with necessary explanations and how such valuation has been arrived at, considering the nature and type of business carried out by the assessee.

3. The AO, after considering relevant submissions of the assessee and also by observing that although the assessee has filed complete details of subscribers along with their financial statements, but failed to provide any justification for charging huge premium with relevant industry experience or any track record towards managing successful business. Although/ the assessee has filed a valuation report, but such valuation is based on assessee’s own calculations and projects which is neither decided nor proved with corresponding previous track record. Therefore, he opined that the assessee has failed to prove the genuineness of transactions in the backdrop of charging such a huge premium on shares, accordingly came to the conclusion that the share capital received from 5 parties has not passed the test of genuinity and accordingly by following certain judicial precedents including the decision of Hon’ble Supreme Court in the case of CIT vs P Mohanakala 298 ITR 289 (SC) and the decision of Hon’ble Bombay High Court in the case of Major Metals Ltd vs UOI (2013) 359 ITR 450 held that share capital received from 5 subscribers amounting to Rs.1.50 crores is not genuine and it represents income of the assessee from undisclosed sources and accordingly he made addition of Rs.1.5 crores u/s 68 of the I.T. Act, 1961.

4. Aggrieved by the assessment order, assessee preferred appeal before the CIT(A). Before the CIT(A), assessee has filed elaborate written submissions on the issue and also referred evidences filed in respect of 5 subscribers before the AO which has been reproduced at paras 2 to 10 of CIT(A)’s order. The assessee also relied upon plethora of judicial pronouncements including decision of Hon’ble Supreme Court in the case of CIT vs Lovely Exports Pvt Ltd (2008) 216 CTR 195 (SC). The Ld. CIT(A), after considering relevant submissions of the assessee and also on analysis of various details filed by the assessee in respect of 5 subscribers held that the assessee has satisfactorily proved identity of the investor, genuineness of transaction along with creditworthiness of the shareholders. Further, share application money paid by them was duly reflected in the bank account of the assessee. The CIT(A) further held that even though the AO has questioned charging share premium on the shares, but fact remains that before amendment of section 56(2)(vii)(b) of the Act, by the Finance Act wef 01-04-2013, the provisions of Rule IIU And IIUA were not applicable for the impugned assessment year and hence, the AO has to examine only the identity, creditworthiness and genuineness of transaction. Since the AO has not doubted the identity of the subscribers and their capacity, merely for the reason of charging higher premium, genuineness of transaction cannot be questioned. Therefore, he came to the conclusion that the addition made by the AO towards share capital received from 5 subscribers correct. The relevant observations of the Ld.CIT(A) are as under:-

5.6 Now let’s discuss the identity, credibility and genuineness of transactions in respect to individual shareholders:

In the case of Pashupati Enclave Pvt. Ltd. – Rs.10,00,0001-, the financial statement of the-said company as on 31.03.2011 reveals the following:

i. Equity capital of Rs.37,36,000/- with high reserves and surplus of 8,73,33,683/ –

ii. Thus the Net Worth of the company was Rs.9,10,69,683/-

iii. The company has investment of Rs.7,50,10,000/-

iv. The company has extended Loans & Advances of Rs.1,19,00,000/-

v. The above mentioned details prove the credibility of the company and capacity to make investment in the appellant’s company.

vi. Identity was proved by submitting PAN. Also notice u/s.133(6) were duly served.

vii. The bank account of the company reflects the payments made to the appellant company for investing in shares. There is no entry in the bank accounts which reflects that the appellant company has paid back the amount of investment.

viii. The company in its response to notice u/s.133(6) has confirmed of having applied for the shares at premium.

ix. Hence addition made in the assessment is not correct.

II. In the case of Pushpanjali Trading Pvt. Ltd.-Rs.25,00,000/-, the financial statement of the said company as on 31.03.2011 reveals as following.

i. Equity capital of Rs.20,77,500/- with high reserves and surplus of Rs.7,71,18,698/-

ii. Thus the Net Worth of the company was Rs.7,91,96,198/-

iii. The company has made investment of Rs.7,74,00,000/-

iv. The above mentioned details prove the credibility of the company and capacity to make investment in the appellant’s company.

v. Identity was proved by submitting PAN. Also notice u/s.133(6) were duly served.

vi. The bank account of the company reflects the payments made to the appellant company for investing in shares. There is no entry in the bank accounts which reflects that the appellant company has paid back the amount of investment.

vii. The company in its response to notice u/s.133(6) has confirmed of having applied for the shares at premium.

viii. Hence addition made in the assessment is not correct.

III. In the case of Satvichar Dealers Pvt. Ltd. – Rs.25,00,000/-, the financial statement of the said company as on 31.03.2011 reveals the following:

i. Equity capital of Rs.7,05,250/- with high reserves and surplus of Rs.5,99,51,207/-

ii. Thus the Net Worth of the company was Rs.6,06,56,457/-

iii. The company has made investment of Rs.30,86,25,000/-

iv. The above mentioned details prove the credibility of the company and capacity to make investment in the appellant’s company.

v. Identity was proved by submitting PAN. Also notice u/s.133(6) were duly served.

vi. The bank account of the ^.company reflects the payments made to the appellant company for investing in There is no entry in the bank accounts which reflects that the appellant company has paid back the amount of investment.

vii. The company in its response to notice u/s.133(6) has confirmed of having applied for the shares at premium.

viii. Hence addition made in the assessment is not correct.

IV. In the case of Seva Infrastructure Pvt. Ltd.-Rs.50,00,000/-, the financial statement of the said company as on 31.03.2011 reveals the following:

i. Equity capital of Rs.5,85,000/- with high reserves and surplus of Rs.4,80,00, 170/-

ii. Thus the Net Worth of the company was Rs.4,85,85,170/-

iii. The company has made investment of Rs.4,63,00,000/-

iv. The above mentioned details prove the credibility of the company and capacity to make investment in the appellant’s company.

v. Identity was proved by submitting PAN. Also notice u/s. 133(6) were duly served.

vi. The bank account of the company reflects the payments made to the appellant company for investing in shares. There is no entry in the bank accounts which reflects that the appellant company has paid back the amount of investment.

vii. The company in its response to notice u/s. 133(6) has confirmed of having applied for the shares at premium.

viii. Hence addition made in the assessment is not correct.

V. In the case of Founders Properties Pvt. Ltd. Rs.40,00,000/-, the financial statement of the said company as on 31.03.2011 reveals the following:

i. Equity capital of Rs.3 ,58,000/- with high reserves and surplus of Rs.2,55,42,000/ –

ii. Thus the Net Worth of the company was Rs.2,59,00,000/-

iii. The company has made investment of Rs.2,57,00,000/-

iv. The above mentioned details prove the credibility of the company and capacity to make investment in the appellant’s company.

v. identity was proved by submitting PAN. Also notice u/s. 133(6) were duly served.

vi. The bank account of the company reflects the payments made to the appellant company for investing in shares. There is no entry in the hank accounts which reflects that the appellant company has paid back the amount Of investment.

vii. The company in its response to notice u/s. 133(6) has confirmed of having applied for the shares at premium.

viii. Hence addition made in the assessment is not correct.

5.7 Letters were issued to the A.Os. of Puspanjali Trading Pvt. Ltd. and Satvichar Dealers Pvt. Ltd., the investee companies. The respective A.O.s has also confirmed the filing of returns and financials of the shareholders and no adverse remark were made.

5.8 The issue regarding additions u/s.68 on share application money has been considered by various Hon’ble Courts. Besides the cases quoted by the appellant following are some of the relevant findings of Courts which are also considered as under:-

1 CIT VS Gangeshwari Metal P Ltd 361 ITR 10 (Delhi)

(i) The Hon’ble High Court of Delhi has held that the genuineness of the transactions is established as the transactions are routed through banking channels It was seen that the share application money was received through a/c payee cheques, detail of which had been filed by the assessee by filing the copy of the bank a/c of the share applicants. Thus where the return of income was filed by the creditors of the assessee and was accepted by the AG and payments were through a/c payee cheques the genuineness of the transaction cannot be doubted. The revenue could not prove that the money received by the appellant in the form of share application has come from its own sources. No evidences regarding this have been brought on record by the A 0.

(ii) In CIT Vs. Divine Leasing & Finance Ltd. 299 JTR 268 the Hon’ble Delhi High Court held that burden of proof can seldom be discharged to the hilt by the assessee. If the AG. harbours doubts of the legitimacy of any subscription he is empowered, rather duty bound, to carry out thorough investigations. But ([the A. 0. fails to unearth any wrong or illegal dealings, he can/lot obdurately adhere to his suspicions and treat the subscribed capital as the undisclosed income of the company. If relevant details of address and identity of the subscribers are furnished to the department alongwith copies of the shareholders register, share application forms, share transfer register etc. it would constitute acceptable proof or explanation by the assessee.

(iii) In Hindustan Inks & Resins Ltd. vs. Dy. C.LT. 60 DTR 0018 (2011) the Hon’ble Gujarat High Court has held as under:

“From the concurrent findings recorded by the authorities below, it is apparent that none of the parties have recorded any findings to the effect that the identity of the depositors had not been established by the assessee. The case of the respondent is that the assessee has failed to explain the source of such cosh as well as creditworthiness of the deposits. It is not the case of the revenue that the subscribers are bogus./ the case of the revenue is that the source. of such cash as well as creditworthiness of the depositors has not been explained. In the circumstances, the department is free to proceed to reopen the individual assessments of the deposits named by the assessee, however, under no circumstances, can the amount of share capital be regarded as the undisclosed income of the assessee.”

iv. In CIT Vs. K.C. Fibres Ltd. in IT Appeal No. 701 of 2009 the Hon’ble Delhi High Court held that in so far as assessing company is concerned, it is not disputed that money was paid to it towards the aforesaid share application money, by means of cheques. It is not for the assessing company to probe as to the source from where DP collected the aforesaid money. It was for the AO, in these circumstances to inquire into the affairs of DP which is an independent company in as much as no finding is arrived at by the AO that the two companies are umbrella companies or have any relationship with each other.

v. In CIT Vs. STI- Extrusion (P) Ltd. 333 ITR 269 the Hon’ble Madhya Pradesh High Court held that that though it is the duty of the assessee to establish the genuineness of the credits but in the present case the assessee has duly established the identity and source of The Tribunal has also held that once the identity and source of the subscribers of the shares is established no addition can he made u/s 68. The assessee having duly furnished the name, age, address, date of filing tire application of shares, number of shares of each subscriber was no justification for the AO for making the impugned addition because once the °fate investors / share subscribers is proved, onus shifts on the revenue to establish that either the share applicants are bogus or the impugned money belongs to the assessee itself After filing of the affidavits of the said subscriber the appellant at no stage of the proceedings sought any opportunity to rebut the said affidavits.

vi. In CIT Vs. Prayag Hospital & Research IT Appeal No. 917 of 20 W the Hon’ble Delhi High Court held that shareholders of the asses see company having appeared before the A0 and furnished affidavits alongwith supporting documents confirming their investment in the assessee, identity of the creditors is established and therefore, addition cannot be made in the hands of the assessee.

vii. In CIT Vs. TDI Marketing (P) Ltd. IT Appeal No.340 of 2009 the Hon’ble Delhi High Court held that assessee company having furnished complete details of shareholders name, addresses, PAN and bankers and they having confirmed the investment and the AO having not given his specific comments on his enquiries pertaining to them except for nine shareholders, addition u/s.68 cannot be sustained.

viii. In CIT vs. Gangour Investment Lid. 335 ITR 359 (2011) the Hon’ble High Court of Delhi held that assessee company having filed the subscription forms of the investors, including TT Ltd., a group company, containing details and information with respect to their addresses as well as PAN, thereby establishing their identity and also supplied a copy of the statement of bank accounts of TT Ltd., it has discharged its onus in respect of the veracity of the transaction and therefore, the addition u/s.68 made by the AO in respect of the impugned investment made by TT Ltd, has been rightly deleted.

ix. Appellant has also placed reliance on recent judgement of Jurisdictional Bombay High Court dtd 20.03,2017 in case of CIT vs; Gagandeep Infrastructure Pvt Ltd where in the Hon’ble court has held that:

“In view of the matter the three essential tests while confirming the section 68 laid down by !fit Court namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned order of the Tribunal and on fact it was found satisfied. Further it was a submission on behalf of the Revenue that such large amount of share premium gives rise to suspicion On the genuineness (identity) of the shareholders, i.e., they are bogus. The Apex Court in a case in this context to the pre-amended section 68 has held that where the revenue urges that the amount of share application money has been received from bogus shareholders then it is far the Income-tax Officer to proceed by reopening the assessment of such shareholder and assessing them to tax in accordance with law. It does not entitle the revenue to add the same to the assessees’ income as unexplained cash credit. [Para 3]”

5.9 As regards the valuation of shares, I find that the appellant has filed valuation report in support of same and also the judgments cited and submissions made by the appellant vide point no.9 of written submissions proves its point regarding the justification of amount of share premium. In para 5.15 of the assessment order the Ld. A.O. has raised issue of high premium without any due diligence. The provisions of S. 56(2)(vii)(b) of the Act and Rules 11U and 11 VA were inserted w.e.f 01.04.2013 i.e. assessment year 2013- 14 on wards. Thus for the year under consideration the Ld. A.O. has to examine only the identity, creditworthiness and genuineness of the transactions only.

5.10 The cases cited by the IA. A.O. differs from the facts and circumstances of that of the appellant as pointed out by the appellant vide it’s written submission reproduced in para 4 of this order.

5.11 In the instant east.. having regard to the documents furnished before me, am convinced about the identity of the investor, genuineness of transaction along with credit-worthiness of the shareholders and the share subscription money paid by them duly reflected in the hank account of the Appellant assessee company. Hence, the facts do not warrant an addition under section 68 of the Act. Further, in the context Of share capital received from alleged bogus shareholders, the Hon’ble Supreme Court has ‘unequivocally laid down the legal position as to whether additions can be made under section 68 of the Act, as under in case of Lovely Exports (P) Ltd. 216 CFR 195:

“If the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the department is ,free to proceed to reopen their individual assessments in accordance with law but this amount of share money cannot be regarded as undisclosed ii7COMe under section 68 of the assessee company.”

5.12 From the details filed, the appellant had not only proved the genuineness of transaction and identity of the investors but it has also proved the creditworthiness of investors. In view of these facts and respectfully following various judgements of Hon’ble FIAT and Hon’ble Courts as discussed in para 6.2.9, appeal of the assessee is allowed and addition of Rs.1,50,00,000/- made by the AO u/s.68 of the Act is deleted.

5. The Ld. DR submitted that the Ld. CIT(A) was erred in deleting addition made by the AO towards share capital received from 5 subscribers for Rs.1 .50 crores u/s 68 of the Act, without appreciating the fact that the assessee failed to produce shareholders before the AO, when the AO has asked the assessee to produce them personally for The Ld.DR further submitted that when the AO has brought out clear facts to the effect that the assessee has not Justified charging higher premium on issue of shares to hold that genuineness of transaction cannot be questioned merely for charging higher premium, ignoring the vital facts that the parties never attended before the AO for examination. The Ld. DR further referring to the decision of Hon’ble Supreme Court in the case of CIT vs P Mohanakala (supra) submitted that mere payment of amount by cheque through banking channels would not be enough to prove the genuineness of transactions. In this case, except furnishing certain evidence to prove identity and payment of amount by cheques, the assessee failed to file any other evidence to justify charging higher premium. Therefore, the AO was very much within his right to make addition u/s 68 of the Act, but the Ld.CIT(A) has negated all observations made by the AO merely for the reason that the assessee has produced necessary evidence in respect of 5 subscribers

6. The Ld.AR, on the other hand, strongly supporting the order of the Ld.CIT(A) submitted that it is a settled position of law that once assessee discharged its initial onus upon filing certain evidence to prove identity, genuineness of transaction and creditworthiness of the parties, then the onus shifts to the AO to prove otherwise. In this case, the AO has disregarded all evidences filed by the assessee so as to reach to a conclusion that the transaction between the assessee and the subscribers is not a genuine transaction only for the reason that shares have been issued at a higher premium without appreciating the fact that issue of shares at a premium and subscription to such shares is a decision between two parties and the AO has no role to play as long as the identity and genuineness of transaction is proved. The Ld.AR further submitted that the AO has only questioned share premium ignoring the fact that Proviso inserted to section 68 of the Ac, by the Finance Act, 2012 wef 01 -04-2013 has no application to the amounts received prior to that date. In this regard, he relied upon a plethora of judgements including the decision of Hon’ble Supreme Court in the case of CIT vs Lovely Exports Pvt Ltd (supra). The assessee also relied upon the following judgements:-

7. We have heard both the parties, perused materials available on record and gone through the orders of authorities below. We have also considered case laws cited by both the parties. The AO has made addition towards share capital received from 5 companies, basically on the ground that although identity of subscribers has been proved, but the transaction between parties did not pass the test of genuineness as the assessee has not justified charging of higher premium on shares without there being any corresponding business activity to justify projections and estimates relied upon for arriving at a share premium. Except this, the AO never doubted identity of the parties. The assessee has filed complete details in respect of 5 parties including their names and addresses, PAN, income-tax returns, copies of financial statements, bank statements, letter of allotment, etc. In fact all 5 parties have replied to notices issued u/s 133(6) alongwith whatever details sought by the AO. In this factual background, if we examine the share capital received from the above 5 companies and such amount falls within the ambit of section 68 of the Act, one undoubted fact emerges that the AO failed to make out a case of credit, which falls within the ambit of provisions of section 68 of the Act, except doubting genuineness of transactions on suspicion and surmise only for the reason of charging higher premium on shares. The provisions of section 68 deal with cases where sum found credited in the books of account, the assessee needs to prove identity, genuineness of transactions and creditworthiness of the parties. Once assessee discharges its initial burden cast upon under 68 of the Act by filing necessary evidences, then the burden shifts to the AO to prove otherwise. In order to fix a particular credit within the ambit of section 68 of the Act, the AO has to bring on record further evidences to prove that the sum found credited in the books of account of the assessee represents undisclosed income of the assessee. In this case, the AO, except doubting genuineness of transaction for charging higher premium on shares, did not bring on record any other evidence to disprove the voluminous evidences filed by the assessee in respect of 5 companies to prove identity and genuineness of transactions. In fact, the assessee has filed complete set of documents for all 5 subscribers. The parties have responded to notices u/s 133(6) by filing necessary evidences. Therefore, merely for the reason that the parties did not appear before the AO or the assessee could not produce the parties in person before the AO, the whole set of documents produced to prove the identity and genuineness of transactions, cannot be disregarded when the AO does not have anything more than suspicion in his possession to doubt the transactions. Therefore, we are of the considered view that the AO was erred in bringing to tax share capital received from 5 companies u/s 68 of the Income-tax Act, 1961 as unexplained credit.

8. Coming to the case laws relied upon by the assessee. The assessee has relied upon plethora of judgments including the decision of Hon’ble Supreme Court in the case of CIT vs Lovely Exports Pvt Ltd (supra). The Hon’ble Supreme Court in the said case held that if the share application money is received by the assessee company from alleged bogus shareholders, whose names were given to the AO, then the department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of assessee company. The Hon’ble Bombay High Court in the case of CIT v. Gagandeep Infrastructure Pvt. Ltd(supra) had an occasion to consider similar issue in the light of bogus share capital and the Hon’ble High Court by following the ratio laid down by the Hon’ble Supreme Court in the case of CIT vs Lovely Exports Pvt Ltd (supra) held that if the three essential test laid down by the Courts, viz. Genuineness of the transaction, identity and the capacity of the investors of share capital alongwith premium have been proved, then the department cannot take, view that the amount of share capital had been received from bogus shareholders. It was for the AO to proceed by reopening the assessment of such shareholders and assessing them to tax. It did not entitle the department to add money received to the assessee’s income as unexplained cash credit. The Hon’ble High Court further observed that Proviso to section 68 of the Income-tax Act, 1961 introduced by the Finance Act, 2012 wef 01-04- 2013 was effective from AY 201 3-14 onwards and whatever amount received prior to that date will not come within the ambit of provisions of section 68 of the I.T. Act, 1961. A series of judgement rendered by Hon’ble Bombay High Court has considered identical issue in the light of decision of Hon’ble Supreme Court and came to the conclusion that once identity, genuineness of transactions and creditworthiness of the parties have been proved, then sum so received cannot be regarded as undisclosed income of the assessee but the department is free to proceed to reopen the assessment of individual shareholders. The sum and substance of the ratio laid down by the above judgements are that in order to overcome the shadow of provisions of section 68 of the Act, the assessee needs to discharge its initial burden by filing necessary details to prove identity, genuineness of transactions and creditworthiness of the parties. The assessee once discharged its initial burden, then the AO cannot add sum so found credited in the books of account of the assessee merely on suspicion and surmises or on the basis of charging higher premium without there being any further evidence in his possession to prove that sum so found credited in the books of account represents undisclosed income of the assessee. In this case, on perusal of facts, it is abundantly clear that the assessee has discharged its initial burden by filing enormous details to prove identity and genuineness of transactions. The AO, having accepted the fact that identity has been proved, could not have proceeded to make addition only on the basis of charging higher premium, because charging higher premium on issue of shares is a decision between parties and the AO would not have any role to play as long as genuineness of transaction is not in doubt. The Ld.CIT(A), After considering relevant facts has rightly deleted addition made by the AO. We do not find any error in the findings of Ld.CIT(A) and hence, we are inclined to uphold the order of the Ld.CIT(A) and dismissed the appeal filed by the revenue.

9. In the result, appeal filed by the revenue is dismissed.