The Tax Publishers2019 TaxPub(DT) 0886 (Del-HC) : (2019) 410 ITR 0379 : (2019) 307 CTR 0281 : (2019) 261 TAXMAN 0270

INCOME TAX ACT, 1961

Section 68

As transactions of receipt of share capital were clearly sham and make believe with excellent paper work to comouflage their bogus nature, AO was justified in taxing share capital as unexplained cash credit under section 68.

Income from undisclosed sources - Addition under section 68 - Unexplained share capital -

Assessee-company claimed to have received share capital along with premium from five companies. As assessee had failed to produce directors of shareholder companies and also AO had received information as to assessee being beneficiary of alleged entry operator 'T', therefore, AO treated share capital as unexplained cash credit under section 68. Assessee furnished affidavits of directors of the shareholder companies along with PAN details, copy of PAN cards, Board Resolutions, confirmations from parties, share application forms and bank account statements of shareholder companies.Held: All the alleged shareholders companies belonged to one 'T' and operated from his office premises. All the directors were either his employees or close relatives. All the passbooks, cheque books, PAN cards, etc., were always in possession of 'T' and his directions all the employees signed all documents All the bank account opening forms appeared to be in the handwriting of 'T'. Books of accounts of all the companies had been retrieved from the computers/laptop 'T'. further, 'T' had given letters for release of bank accounts of companies put under restraints after search. Assessee had also failed to produce details and particulars with regard to issue of shares notices, etc. to shareholders of AGM/EGM, etc. In view of this transactions in question were clearly sham and make-believe with excellent paper work to camouflage their bogus nature. Accordingly, AO was justified in making addition under section 68.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2008-09



IN THE DELHI HIGH COURT

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com