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2020 (12) TMI 344 - AT - Income TaxUnexplained receipt of money u/s 68 - as per AO creditworthiness and genuineness of the transaction cannot be said to have been proved - information received by AO under exchange of information provisions - assessee has got an investment from Kstart LLC, Mauritius as a contribution towards issue of 20,000 compulsorily convertible preference shares - HELD THAT:- Evidences obtained by the learned assessing officer in terms of article 26 of the Double Taxation Avoidance Convention between India and Mauritius, the annual financial statement of the investor, the background of the investor as mentioned in the financial statements, the amount of investments made by the investor in other companies across the globe, the amount of share capital introduced by the holding company of the investor, the financial operations of the investor deciphered from the financial statements of the investor, Financial and Legal Due diligence by investors, we do not find that there is an iota of doubt about the creditworthiness and genuineness of the about transaction of allotment of 20,000 compulsorily convertible redeemable shares resulting into allotment of shares worth ₹ 1, 67,50,000 from K start LLC of Mauritius. Various judicial precedents relied upon by the learned CIT – A and the learned assessing officer supporting the above addition made by the learned assessing office are not applicable to the facts of this case as in this case assessee has proved identity, creditworthiness of the investor as well as the genuineness of the whole transaction - We delete the addition made u/s 68 with respect to the about transaction - Decided in favour of assessee.
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