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The ITAT reversed the CIT(A)'s deletion of additions under section 68, holding that the assessee failed to establish the identity, creditworthiness, and genuineness of share application receipts. The tribunal rejected the conduit company theory and found no credible evidence of an agency or commission arrangement. It emphasized that mere denial or attribution to a third-party entry operator does not discharge the assessee's burden to explain unexplained credits. Given the absence of financial capacity in investors, contrived fund flows, and lack of business rationale, the unexplained amounts were rightly treated as income. The AO's addition was restored, and the Revenue's appeal was allowed in full, affirming that unexplained credits must be treated as income unless satisfactorily explained by the assessee.
The ITAT reversed the CIT(A)'s deletion of additions under section 68, holding that the assessee failed to establish the identity, creditworthiness, and genuineness of share application receipts. The tribunal rejected the conduit company theory and found no credible evidence of an agency or commission arrangement. It emphasized that mere denial or attribution to a third-party entry operator does not discharge the assessee's burden to explain unexplained credits. Given the absence of financial capacity in investors, contrived fund flows, and lack of business rationale, the unexplained amounts were rightly treated as income. The AO's addition was restored, and the Revenue's appeal was allowed in full, affirming that unexplained credits must be treated as income unless satisfactorily explained by the assessee.
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