INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Receipt of share capital/premium - Assessee failed to file necessary details

AO noticed that paid up capital of assessee company was at Rs. 6,37,250 and security premium was at Rs. 107,37,62,850. AO being not satisfied with the genuineness of share capital and share premium/security premium received by assessee company treated the same as unexplained cash credit under section 68.Held: The assessee failed to file necessary details to explain source of alleged cash credit and was also unable to prove identity, and creditworthiness of the shareholders as well as genuineness of the transaction. Assessee miserably failed to explain source of alleged cash credit. If assessee had sufficient details to explain the alleged sum, it could have certainly filed those details. Consistently escaping from appearing before AO and CIT(A) indicated that assessee had no plausible explanation to explain the source of alleged sum of share capital and security premium totalling to Rs.107 crore. Therefore, it could be safely concluded that the assessee had unaccounted income, which has been routed in the books of account through bogus/accommodation entry in the form of share capital and security premium and, therefore, AO rightly made addition under section 68.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2012-13

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