· AO made the addition u/s 68 of the Act alleging that assessee had not discharged its onus to establish that the amount was received from shareholders as share application money. AO made the impugned addition stating that the parties from whom assessee had received share amount never responded to the summons issued.
· Assessee provided the PAN of all the creditors along with confirmation, bank statement, share application form, allotment letter, share certificate and financial statements of the creditors.
· Hon’ble High Court observed that AO had made the addition only on the ground that the parties did not appear before him and the summons could not be served on the addresses given. High Court further observed that the assessee has produced on record the documents to establish the genuineness of the party.
· Hon’ble High Court further took note of the fact that the assessee has also produced the entire record regarding the issuance of shares. It was further observed by the Court that the parties had sufficient funds in their accounts for investing in the shares of assessee.
· Therefore, the Court was of the view that considering the voluminous documentary evidences, the fact that the parties had not appeared before the AO would not negate the case of assessee.
· Therefore, the Hon’ble High Court dismissed the appeal of the Revenue.
For further reading, refer the attachment.
Further Reading