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2019 (2) TMI 1773 - AT - Income TaxUnexplained cash credit u/s.68 - Unexplained share capital and share premium - HELD THAT:- Out of 11 share applicants, six share applicants had duly responded to the notices issued u/s.133(6) of the Act totalling to ₹ 1,43,00,000/-. AO did not proceed to make further enquiries with regard to these six share applicants. He merely disbelieved the various documentary evidences submitted before him with regard to these six share applicants without any basis. With regard to the remaining five share applicants totalling to ₹ 84,50,000/-, no replies were received u/s.133(6) of the Act, but the details about the shareholders in the form of name, address of the share holders, ITR acknowledgements, copies of share application form, return of allotment filed with the Registrar of the companies, their confirmations, balance sheets and their bank statements were indeed filed by the assessee before the Ld. AO. No deficiencies were found in the said documentary evidences filed by the assessee in order to draw any adverse inference thereon. Admittedly all the 11 share applicants had sufficient net worth in the form of share capital and reserves and surplus to make investment in the share company which duly proved their creditworthiness. All the transactions were routed through regular banking channels which prove the genuineness of the transactions also. All the share applicants are duly assessed to Income Tax which is quite evident from the copy of income tax return acknowledgement filed before the Ld. AO thereby proving their identity. Also developer i.e., M/s. Nigo’s Properties Ltd., had expressed their willingness to purchase from the company, the rights to further develop the property for its business purposes. Hence, we find that the assessee company had tried to capitalize on the possession of leasehold rights for a period of 99 years which could be commercially exploited by way of development for industrial purposes and accordingly, had entered into agreement with M/s. Nigo’s Properties Ltd., and for such commercial exploitation the assessee had factored that future act into account for the purpose of justification of share premium from various share applicants. - Decided in favour of assessee.
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