2006 (1) TMI 74

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lled upon the assessee to explain why the amount mentioned above be not added back under section 68 of the Income-tax Act, 1961 (for short "the Act"). The assessee submitted a reply, which did not find favour with the Assessing Officer, resulting in the addition of the amount indicated earlier to the taxable income of the assessee. In an appeal preferred by the assessee against the said order, the Commissioner of Income-tax (Appeals) relied upon judicial pronouncements to hold that the burden to prove the identity of the creditors and the genuineness of the transactions lay upon the assessee. Having said so, the Commissioner affirmed the view taken by the Assessing Officer that the burden had not been discharged by the assessee in the insta....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... genuineness of the transactions or the truthfulness of the explanation offered by the assessee and resort to section 68 in case the same was found to be unsatisfactory. The facts, in the instant case, according to learned counsel, did not establish the genuineness of the transactions, no matter that the genuineness of the persons, in whose favour the shares were alleged to have been issued, had been established and the payments received by the assessee were by way of cheques. In Stellar Investment's case [1991] 192 ITR 287 (Delhi) the issue which the Revenue proposed to raise, related to the propriety of the Tribunal taking resort to section 263 in the case by ignoring the material fact that the Assessing Officer had failed to discharge....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e subscribers to the increased share capital were on inquiry by the Assessing Officer found to be not genuine, nevertheless the amount of share capital could in no circumstances be regarded as undisclosed income of the assessee. The issue as to whether an inquiry was possible into the genuineness of the transactions at the hands of the Assessing Officer came up for consideration of a Full Bench of this court in the case of Sophia Finance Ltd. [1994] 205 ITR 98. The question there was whether the Income-tax Officer was entitled to enquire into the genuineness of the shareholders and the truthfulness of the explanation offered by the assessee to explain the credit entries in its books of account. Answering the question in the affirmative t....