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2020 (5) TMI 136 - AT - Income TaxAddition u/s 68 - undisclosed income of the sums received as share premium - HELD THAT:- AO has categorically mentioned that there is no doubt about the genuineness of the source of fund. He has accepted the identity, creditworthiness and genuineness of the sources of funds of the share applicants. AO has drawn adverse inference on the ground that the assessee company’s performance does not command the justification for share premium. In this regard by referring to the observations about shell companies the AO has contradicted himself by observing that the source of fund is duly explained. It is quite settled that in shell companies there is doubt about the source of funds. As regards the reliance of the AO on the decision of Major Metals [2012 (4) TMI 227 - BOMBAY HIGH COURT] is concerned the same was with respect to the order of the settlement commission wherein the veracity of the funds were in doubt and in those circumstances honourable jurisdictional High Court has upheld the order of the settlement commission with regard to the absence of genuineness of the source of share premium. In the present case we note that assessee has duly submitted all the necessary documents for the verification of the identity creditworthiness and genuineness of the share applicants as evident. Examination of justification of share premium is concerned it is noted that the concerned provision in income tax law was brought into statute books in the form of section 56 (2)(vii)(b) . This was with effect from 2013-14. Honourable jurisdictional High Court in the case of M/s. Gangadeep Infrastructure (P) Ltd. [2017 (3) TMI 1263 - BOMBAY HIGH COURT] has duly held that the said provision is prospective. In the present case there is no such doubt as the assessing officer has accepted that the sources of funds are duly explained. Further those decisions refer to the absence of the share applicants and/or their director at the given address. There is no such case made out by the AO here. Furthermore some of the cases refer to notices returning unserved, which is not at all the case here. Hence these decisions do not fructify the revenues case in the fact of the present case. The other decisions referred by learned counsel of the assessee duly support the case of the assessee. No infirmity in the order of learned CIT(A). Decided against revenue.
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