Law:

Section:

Section 68 of the Income-tax Act, 1961 - Cash credits - Assessee-company received subscription from directors, promoters as well as from shareholders - Assessing Officer, however, disbelieved genuineness of subscription received by assessee - In course of enquiry, nothing was disclosed about identity of subscribers except furnishing a list of subscribers - Assessing Officer and Commissioner (Appeals), therefore, disallowed amounts subscribed under section 68 - On appeal, Tribunal, however, held that since amounts were paid to assessee-company by cheques, same could not have been disallowed - Whether since nothing had been produced before authorities either for establishing identity of subscribers or for proving their creditworthiness and genuineness of transaction, amount subscribed by public was to be disallowed under section 68 - Held, yes FACTS The assessee was a public limited company. The Assessing Officer disbe-lieved the genuineness of the subscription received by it from its directors, promoters as well as from the public. On appeal, the Commissioner (Appeals) remanded the matter to the Assessing Officer for enquiring the matter afresh on the ground that earlier enquiry was made in haste. In the course of enquiry, it was found that the income-tax file numbers of the promoters and directors were disclosed and all those payments were made by cheques except a subscription of Rs. 20,000 which was made in cash by one 'A' who was not an income-tax assessee. The rest was subscribed by general public. Despite successive opportunity being given, nothing was disclosed about the identity of the subscribers except furnishing a list of subscribers. Therefore, on appeal, the Commissioner (Appeals) disallowed the amount subscribed by public under section 68. On second appeal, the Tribunal had held that since amounts were paid by cheques, same could not have been disallowed. On reference : HELD When section 68 is resorted to, it is incumbent on the assessee to prove and establish the identity of the subscribers, their creditworthiness and the genuineness of the transaction. Once materials to prove these ingredients are produced, it is for the Assessing Officer to find…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492