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2019 (8) TMI 1404 - AT - Income TaxAddition u/s 68 - conversion of preference share into equity share - alleged that assessee did not submit proper explanation about the nature and source of sums credited in its books - HELD THAT:- Assessee has credited the amount of preference shares in the earlier year which has now converted into equity-shares capital. The AO nowhere doubt over the identity and creditworthiness of the investor and genuineness of the transaction. The only doubt is that the value of share premium charged is not truly reflecting the intrinsic value of the equity shares of the company. Valuation of charging of shares premium could not be basis for making addition u/s 68. The assessee nowhere credited the cash/sum in the books of accounts which is the essential condition to apply the provisions of u/s 68 - assessee submits the certificate obtained from the CA in which the valuation of the share has been duly assessed. The assessee also produced the letter dated 14.06.2010 produced before the RBI and also submitted the certified copy of resolution of Extra Ordinary Meeting of Member’s for obtaining consent for conversion which has been marked as annexure-C. The assessee has also produced the concerned letter of preference shareholder for conversion marked as annexure-D CIT(A) has decided the matter of judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, this issue is being decided in favour of the assessee against the revenue.
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