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2022 (9) TMI 1571 - AT - Income TaxAddition u/s 68 - unexplained cash credit - genuineness of the transaction not proved - source of source unexplained - HELD THAT:- When the assessee had discharged the primary onus that was cast upon it by placing on record supporting documentary evidence to substantiate the genuineness and veracity of the transaction of having received share capital and premium from the aforesaid share subscriber i.e. M/s. Lovely Suppliers Pvt. Ltd., therefore, the onus was shifted upon the A.O to prove otherwise. It was further noticed that as the share subscriber company was duly registered with ROC and was having registered offices a/w. registration number, and the fact that the payment towards share capital and share premium was received through banking channels, therefore, the genuineness of the transaction could not be doubted in absence of any material placed on record which would prove to the contrary. Source of source - Source out of which the share subscriber company i.e. M/s. Lovely Suppliers Pvt. Ltd. (supra) had made the payment towards share capital and share premium to the assesee company, it was observed by the CIT(Appeals) that the aforesaid share subscriber had during the year under consideration sold its investments and in lieu thereof was in receipt of money from various other companies. As rightly concluded by the CIT(Appeals) that as the assessee by placing on record substantial documentary evidence had proved to the hilt the genuineness of the transaction, therefore, the A.O without carrying out any enquiry could not have justifiably drawn adverse inferences as regards the authenticity of the transaction in question. Accordingly, drawing support from the judgement of CIT Vs. Lovely Exports (P) Ltd. [2008 (1) TMI 575 - SC ORDER] and Venkateshwar Ispat (P) Ltd. [2009 (5) TMI 290 - CHHATTISGARH HIGH COURT], it was observed by the CIT(Appeals) that now when the investment made by the share subscriber company, viz. M/s. Lovely Suppliers Pvt. Ltd. was duly reflected in the latter’s audited financial statement for the year under consideration, therefore, there was no justification on the part of the A.O in dislodging the claim of the assessee of having raised genuine amount of share capital and share premium from the aforesaid party without placing on record any material which would prove otherwise -CIT(Appeals) had rightly vacated the addition made by the A.O u/s.68 - Decided in favour of assessee. Disallowance u/s.14A r.w.r. 8D(2)(iii) - no exempt income earned - HELD THAT:- When the assessee company had not received any exempt dividend income during the year under consideration, therefore, no disallowance u/s.14A of the Act was warranted in its case. We, thus, finding no infirmity in the view taken by the CIT(Appeals) who had rightly vacated the addition - Decided in favour of assessee.
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