Case Law Details
ITO Vs M/s. Panchsheel Commotrade Pvt. Ltd. (ITAT Kolkata)
Conclusion:
Since all the three conditions as required u/s. 68 i.e. the identity, creditworthiness and genuineness of the transaction was satisfied by assessee and the onus shifted to AO to disprove the materials placed before him, therefore, without doing so, the addition made by AO based on conjectures and surmises could not be justified.
Held:
AO opined that the equity share capital money of Rs. 2,92,00,000/- was unexplained cash credit u/s 68 and the same was to be added to the income of assessee because no directors of assessee-company or the share subscribers appeared before him in compliance to summons issued under section 133(6) till the completion of assessment . It was held both the nature & source of the share application received was fully explained by assessee. Assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO’s record. Accordingly all the three conditions as required u/s. 68 i.e. the identity, creditworthiness and genuineness of the transaction was placed before AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by AO was based on conjectures and surmises could not be justified. Thus, no addition was warranted under Section 68.
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