2025 (7) TMI 955

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....) has erred in confirming the addition of Rs. 1,19,00,000/- and Rs. 1,78,500/- which were added by the AO with the aid of Section 68 and 69C of the Income Tax Act on account of receiving bogus share capital along with premium and commission expenses in arranging such a bogus share capital. 3. This appeal was earlier heard on 15.09.2016 and it was dismissed for want of prosecution. Later on, it was revived to its original number by the ITAT vide its order dated 17.03.2023 passed in MA 24/CHD/2017. Shri Tej Mohan Singh, Advocate has appeared on behalf of assessee in the Miscellaneous Application and thereafter in the appeal, however, he has pleaded no instruction because according to him, his client is not in his contact, inspite of best e....

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....ed share capital of Rs. 11,90,000/- and share premium of Rs. 1,07,10,000/-. The AO, thereafter, made analysis of alleged bogus transaction of share capital and made the addition. 6. On appeal, ld. CIT (Appeals) has observed that the identical issue was considered in the case of the assessee for assessment year 2005-06 and 2006-07, hence, this appeal is dismissed in terms of assessment year 2005-06 and 2006-07. 7. With the assistance of ld. DR, we have gone through the record carefully. Before we embark upon an enquiry on the facts of the present appeal, in order to find out whether the share capital and share premium money received by the assessee during the year is required to be treated as its unexplained credit and deserves to be t....

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....sessee. Once the alleged share application money is credited to the accounts of the assessee, then role of Section 68 would come. A perusal of this Section would indicate that basically this Section contemplates three conditions required to be fulfilled by an assessee, namely ; a) Identity of share applicants b) Genuineness of the transactions, and c) Credit worthiness of share applicants 7.1 As far as construction of Section 68 and to understand its meaning is concerned, there is no much difficulty. The difficulty arises when we apply the conditions formulated in this Section on the given facts and circumstances. The Hon'ble Delhi High Court in the case of CIT Vs Navodaya Castles Pvt. Ltd. 367 ITR 306 has ....