147 Reopening of Bogus share capital: Though the reopening is based on information supplied by the investigation wing, the reasons do not specify paras Forex Broker the investment was non-genuine. In this context, Assessing Officer refers to the requirement of verifying the genuineness of investor and requirement of further investigation. These observations would not further the case of the Revenue, these being no information with the Assessing Officer, prima facie, indicating that the investments were not genuine. It is against human probability that anyone will invest and pay share premium in a company without net worth or future prospectus.
All applicants with common address are being controlled remotely by one person. It is against the human probability that anyone will invest and pay share premium of Rs. The current directors have not been able to justify, why the shares were purchased at high premium, without corresponding valuation of the company, which was having meagre income. Premium must be subjected to careful scrutiny especially in private placement of shares. Filing primary evidence is not sufficient. The onus to establish credit worthiness of the investor companies is on the assessee. Premium must be subjected to careful scrutiny.
This would be particularly so in the case of private placement of shares, where a higher onus is required to be placed on the Assessee since the information is within the personal knowledge of the Assessee. 68 Bogus transactions: The AO cannot treat losses from off market commodity transactions as bogus and inadmissible in the eyes of the law if the transactions through the broker are duly recorded in the books of the assessee. The broker has also declared in its books of accounts and offered for taxation. To hold a transaction as bogus, there has to be some concrete evidence where the transactions cannot be proved with the supportive evidence. Here in the case the transactions of the commodity exchanged have not only been explained but also substantiated from the confirmation of the party. Both the parties are confirming the transactions which have been duly supported with the books of accounts and bank transactions.
Intimation for Bogus share capital: The AO cannot reopen without establishing prima facie that assessee’s own money has been routed back in form of share capital. While he can rely on the report of the Investigation Wing, he has to carry out further examination and analysis in order to establish the nexus between the material and formation of belief that income has escaped assessment. Based on perusal of the report of the DIT, Investigation Wing, New Delhi, the Assessing officer has formed not merely a prima facie belief but has reached a conclusion that the assessee has routed back his undisclosed income in the form of share capital. 68 Bogus share capital: In the case of a private company, Onus is on assessee to prove identity, creditworthiness of subscribers and most importantly genuineness of transactions.
Under Section 68 onus is upon assessee to prove three ingredients, i. As to how onus can be discharged would depend on facts and circumstances of each case. Assessee before us is a private limited company. It cannot issue shares in manner in which a public limited company does.