2023 (3) TMI 774 - AT - Income Tax

Addition u/s 68 - Bogus investment in the share capital and share premium - CIT-A deleted the addition - HELD THAT:- Both the share applicants are duly assessed to tax and financial statements are audited, transactions have been carried out through banking channel and both share applicants have replied to the notices issued by ld. AO confirming the said transactions and also stated that they are part of the same group of companies, that for the transfer of shares of Shivalaya Ispat & Power Pvt. Ltd., a Share Sale Agreement was entered into with Real Ispat and Power Ltd. and by carrying out the sale transactions the sale consideration received has been utilized for making the investment in the share capital and share premium of the assessee company. Reliance placed by the assessee on the various decisions and judgments referred in the paperbook extracted above also supports our view that under the given facts and circumstances, addition u/s 68 of the Act was uncalled for.

We, therefore, under the given facts and circumstances of the case are satisfied that the assessee has properly explained the identity and creditworthiness of the share applicants and the genuineness of the alleged transactions and has also explained the source of source of the alleged sum received by the assessee. Thus, we do not find any reason to interfere in the finding of ld. CIT(A). Appeal filed by the Revenue is dismissed.