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2021 (6) TMI 325 - AT - Income TaxAddition in respect of the Share Capital and Share Premium as unexplained cash credit u/s. 68 - amount received on the share application from five investors for allotment of shares during the financial year - HELD THAT:- We find that no statement has been recorded in respect of these companies in the assessement proceedings. A.O without going into the detail aspects has made addition and further we found that that the A.O has dealt elaborately on the statement of Shri Rajesh Agarwal who was connected to these shareholder companies and further Shri Rajesh Agarwal has retracted his statement and it was also brought to the knowledge of the A.O. A.O has made addition based on surmises and conjunctions without proper verification and enquiry. We find that 4 investor companies financial statements were dealt and the findings are that the investors companies have a positive net worth and only a small percentage of investments were deployed which cannot be disputed. These five investors companies invested in the share capital at share premium in the assessee company referred at Sr. No. 1,2,4,5 and 8 of the chart where the Honble Tribunal has considered the financial aspects and observed that these companies can make investments and the investments percentage range from .47% to 5.45%. All the five investor companies contributed the share capital and premium were subject matter of adjudication by the Hon’ble Tribunal and was treated as genuine in the above cases. We find that these five investor companies are part of the decisions of the Hon’ble Tribunal for the same assessment year. We Considering the overall facts, circumstances, submissions and Hon’ble Tribunal decisions, are of the substantive opinion that the assessee could able to substantiate its case and satisfy three ingredients being identity, creditworthiness and genuineness of the transactions. The Hon’ble Tribunal has dealt elaborately on the net worth of these companies and percentage of the investments are comparatively lower than total net worth of the investor companies. Accordingly, we respectfully follow the judicial precedence and set aside the order of the CIT(A) and direct the assessing officer to delete the addition and allow this ground of appeal in favour of the assessee.
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