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2022 (8) TMI 1183 - AT - Income TaxUnexplained cash credit - Addition u/s 68 - increased share capital - HELD THAT:-. Honourable Delhi High Court in the case of Steller Investment Ltd. [1991 (4) TMI 100 - DELHI HIGH COURT] held that “it is evident that even if it be assumed that the subscribers to the increased share capital were not genuine, nevertheless, under no circumstances, can the amount of share capital be regarded as undisclosed income of the assessee. It may be that there are some bogus shareholders in whose names shares had been issued and the money may have been provided by some other persons. If the assessment of the persons, who are alleged to have really advanced the money is sought to be reopened, that would have made some sense but we fail to understand as to how this amount of increased share capital can be assessed in the hands of the company itself.” As assessee has successfully discharged its onus by proving the identity, genuineness of the transaction and the creditworthiness of these two share applicants namely Sadgi Agarwal and Milestone Commosales Pvt. Ltd. which utilised the loan taken from another company namely M/s. Tobu Engineering Ltd. for making investment in the assessee company and also under the given facts and circumstances where the share application money received from M/s. Tobu Engineering Ltd. by the assessee stands explained before Ld. CIT(A), we find no merit in the addition made by Ld. AO. We, therefore, reverse the finding of Ld. CIT(A) and delete the addition made u/s 68. - Decided in favour of assessee.
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