No Addition u/s 68 of Income Tax Act on Share Premium allowable when Identity & Creditworthiness of Share Subscribers Proved: ITAT

The Kolkata bench of the ITAT ruled that once the assessee establishes the identity and creditworthiness of share subscribers, the burden shifts to the AO to scrutinize evidence and conduct inquiries. 

Finding the AO's failure to identify discrepancies, the addition under Section 68 of the Income Tax Act was deemed invalid. Dream Valley Barter Pvt. Ltd contested the AO's addition of share capital and premium as unexplained income under Section 68. The CIT(A) upheld the AO's order mechanically, lacking discussion on material facts. 

Despite summons, the subscriber company's director didn't appear. Citing precedent, the tribunal emphasized the AO's duty to examine evidence thoroughly. The ITAT, led by Sanjay Garg and Dr. Manish Borad, absolved the addition due to the AO's inadequate scrutiny.