In Brief
A company received ₹17.6 crore as share capital from multiple investor companies but failed to satisfy the assessing officer that the transaction was genuine or that the investors had the financial capacity to invest. The Court held that under Income Tax Act Section 68, the company bears the primary burden to prove by cogent evidence: the identity of investor companies, their creditworthiness, and the genuineness of the transaction. Field inquiries revealed several investor companies were non-existent, while others declaring negligible income had invested substantial amounts at an inflated premium. The Court allowed the appeal and restored the addition of ₹17.6 crore to the company's income, emphasizing that documentation alone (bank transfers, ITR acknowledgments) cannot discharge the onus when independent investigation reveals the transaction lacks credibility or genuine economic substance.
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