DCIT vs Chemgems (India) Pvt. Ltd.

Whether the addition of Rs. 1,00,00,000/- made by the Assessing Officer under section 68 of the Income Tax Act, 1961, on account of share capital and share premium received from two companies, was justified when the assessee had furnished substantial documentary evidence establishing the identity, creditworthiness, and genuineness of the transactions, despite the directors of the subscribing companies not appearing before the AO? --- Held: No, the addition is not justified. The assessee discharged its onus under section 68 by providing comprehensive evidence, including confirmations, bank statements, audited accounts, PAN cards, and income tax returns of the share subscribers. The AO's reliance solely on the non-appearance of directors was insufficient to reject the evidence, especially when the transactions were through banking channels and the subscribers were registered NBFCs. The CIT(A) correctly deleted the addition, and the Tribunal upholds this decision.