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2019 (4) TMI 1297 - AT - Income TaxAddition towards share capital u/s 68 - Summons issued u/s 131 complied with - source of source is also proved - HELD THAT:- The share subscribing companies are duly assessed to income tax. It is not in dispute that the share subscribing companies are in existence. It is not in dispute that the share subscribing companies are duly assessed to income tax and their income tax particulars together with the copies of respective income tax returns with their balance sheets are already on record . Hence it could be safely concluded that they are genuine shareholders and not bogus and fictitious. The directors of share subscribing companies also presented themselves before the ld AO in response to summons issued u/s 131 in the instant case. Accordingly, the ratio laid down by the Hon’ble Apex Court in the case of M/s Earthmetal Electricals P Ltd [2010 (7) TMI 1137 - SUPREME COURT] would be squarely applicable to the facts of the instant case. Source of funds were never established by the investor companies in the case before the Hon’ble Apex Court in CIT VERSUS NRA IRON & STEEL PVT. LTD., [2019 (3) TMI 323 - SUPREME COURT] , whereas in the instant case, the entire details of source of source were duly furnished by all the respective share subscribing companies before the ld AO in response to summons u/s 131 by complying with the personal appearance of directors. Hence the decision relied upon by the ld DR is factually distinguishable and does not advance the case of the revenue. In the facts of the present case, both the nature & source of the share capital received with premium were fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed before the AO. Accordingly, all the three conditions as required u/s. 68 i.e. the identity, creditworthiness and genuineness of the transaction were placed before the ld AO and the onus shifted to the ld AO to disprove the materials placed before him. Without doing so, the addition made by the ld AO is based on conjectures and surmises cannot be justified. - Decided in favour of assessee.
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