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2019 (4) TMI 63 - HC - Income TaxUnexplained credit u/s 68 - issuance of preference shares to P5 Asia Holding Investment (Mauritius) Ltd (P5AHIML) - AO alleges that only a sum of ₹ 7.31 crores received from P5AHIML for its own operation, the balance amount was transferred to Idea Cellular Ltd (holding company) or to Idea Cellular Infrastructure Services Ltd for the purpose of other investment - the Assessing Officer in his remand report agreed that the investments were genuine - investment made by P5AHIML was done registering itself with SEBI and after obtaining necessary approvals from Ministry of Finance - CIT(A) dismissed the appeal for wanty of time as it was direct by High Court to pass order within 3 months - Tribunal after detailed inquiry allowed the appeal HELD THAT:- at every stage, the full inquiry of source of funds and other relevant factors in relation to the investment in question was carried out. The Assessing Officer himself carried out a detailed inquiry. His initial suspicion or in other words starting point of inquiry on the basis that apparently the investor was investing huge amount which may prima facie appear to be without adequate possible returns, may be fully justified. However, when all the relevant factors are properly explained, including the fact that the payment of dividend was not the sole attraction for the investor and that the investor could expect a fair return on the investment, of course, subject to vagaries of the any business decision, the Assessing Officer had to advert to all such materials on record in proper perspective. As noted by the Tribunal, all necessary permissions and clearances were granted by the Government of India and other government authorities for such investment. The source of the funds in the hands of P5AHIML was also verified. The Assessing Officer himself was also prima facie of the belief that the materials on record prove genuineness and financial capacity of the persons making investment. Tribunal carried out the detailed inquiry into all aspects of the matter and noticed no suspicious movement of the funds. Merely because the investment was considerably large and as noted, several corporate structures were either created or came into play in routing the investment in the assessee through P5AHIML would not be sufficient to brand the transaction as colourable device. - Appeal of department is dismissed.
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