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2022 (2) TMI 1390 - AT - Income TaxAddition u/s 68 - unexplained share capital and share premium assessee company could not establish the genuineness of transaction - manadation of recording satisfaction - scope of amendment - CIT(A) deleted the addition - HELD THAT:- We note that with effect from assessment year 2013-14 section 68 has been amended to provide that if a closely held company fails to explain the source of share capital, share premium or share application money received by it to the satisfaction of the A.O., the same shall be deemed to be the income of the company u/s 68 of the Act. The said amendment has been held to be prospective and not retrospective in Gagandeep Infrastructure Private Limited [2017 (3) TMI 1263 - BOMBAY HIGH COURT]. In a recent decision of Hindusthan Tea Trading Co. Ltd.. [2003 (3) TMI 53 - CALCUTTA HIGH COURT] it was held that the power of the assessing officer u/s 68 is not an absolute one. It is subject to his satisfaction where an explanation is offered. The power is absolute where the assessee offers no explanation. The satisfaction with regard to the explanation is in effect an in-built safeguard in section 68 protecting the interest of the assessee. It provides for an opportunity to the assessee to explain the nature and source of the fund. Once it is explained, it is incumbent on the assessing officer to consider the same and form an opinion whether the explanation is satisfactory or not. We are of the view that in assessee`s case the three ingredients of the Section 68 are satisfied to a reasonable extent, by the assessee. That being so, we decline to interfere in the order of ld CIT(A), his order on this issue is hereby upheld and grounds of appeal raised by the Revenue is dismissed.
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