INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Receipt of share capital/premium - Identity, creditworthiness and genuineness of transactions

Assessee-company received share capital along with premium. AO treated the same as unexplained cash credit under section 68 on the ground that creditworthiness of share subscribers could not be proved.Held: AO himself had issued 133(6) notices to share subscribing companies to verify their identity, creditworthiness and genuineness of their transactions with assessee-company and those companies had confirmed investment made by them in assessee-company. Also, assessee had furnished details of share applicants giving date-wise receipts, mode of payment, amount, name, address, income tax returns, PAN of share applicants along with their balance sheet. Thus, assessee had discharged onus cast on it to prove identity and creditworthiness of share applicant and genuineness of impugned transactions. Since evidences filed by assessee remained uncontroverted, therefore, addition made under section 68 based on mere conjectures and surmises, could not be sustained.