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2019 (4) TMI 401 - AT - Income TaxAddition u/s.68 - Securities Premium received from Investors - addition u/s 56(2)(viib) - addition u/s addition as shares were issued at high premium since the financials of the company did not justify issue of shares at high premium - Source of source - HELD THAT:- nothing in law prohibits issue of shares at high premium and the assessee had duly complied with statutory requirements as to shares allotment. Importantly, the provisions of Section 56(2)(viib) were not applicable to the assessee since these provisions are inserted by Finance Act, 2012 and are applicable with effect from 01/04/2013 only. The revenue, in our opinion, by questioning the wisdom of the investor, could not make addition in the hands of the assessee as unexplained cash credit u/s 68 unless it was established that the assessee’s unaccounted money was routed in the books through the mechanism of fictitious share allotment. Nothing on record demonstrate such exchange of cash between the investor and the assessee. The assessee was incorporated only during the year 2008 and it was in the process of setting up its business operations. Under this scenario, is difficult to infer that the assessee had such huge unaccounted money in its possession which was routed in the accounts through the mechanism of share allotment. The assessee was required to prove the source of the money only and nothing beyond. We find that the assessee has demonstrated the same by filing the requisite documents in this regard to the revenue authorities. Totality of the above factual matrix as well as settled legal position lead us to form a belief that the impugned additions u/s 68, in the hands of the assessee, were not justified. By deleting the same, we allow the appeal of assessee
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