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2024 (1) TMI 56 - AT - Income TaxAddition u/s 68 - Bogus LTCG - genuineness of source of source of share application money/premium was not proved - receipt of share capital from shell / brief case companies by the assessee company and therefore the same should be considered as bogus income - HELD THAT:- Since it is explicitly proved that the amount so received by the assessee company from M/s TEVPL was already taxed in the hands of investor company, the same has an explained source, thus, it can be safely held that the impugned amount is duly explained, thus, out of the scope of provisions of section 68. Amount of share capital received by the assessee from TEVPL are tax paid funds thus in the nature of explained sources, the same can’t be taxed again by bringing the same in the sweep of provisions section 68 - Thus, on account of declaration by the investor company under VSVS and payment of taxes on the disputed addition, the funds raised under the head share capital and premium by it in AY 2012-13 are explained in the hands of TEVPL, consequently, we find it appropriate to affirm the decision of Ld CIT(A) to vacate the addition received as share capital from M/s TEVPL. Share applicants’ money received from the second share applicant, M/s Moon Shine Mercantile Pvt. Ltd. AR furnished all the necessary documents Qua the source and also pertaining to source of source to establish that the funds received by the assessee company are duly explained, but, the same were not found satisfactory for the reason that the financials of the Share subscriber i.e., M/s Moon shine Mercantile Pvt. Ltd. and its source company i.e., M/s Rudra Mukhi Financials Pvt. Ltd. have shown merger / negative income in their ITR also audited financials of the source of source M/s Rule Mukhi Financials Pvt. Ltd. are not found furnished before us. From the records available it is evident that such information was not furnished before the revenue authorities too, thus the onus cast upon the assessee in terms of 1st proviso to section 68 was not satisfied at any stage of assessment proceedings or appellate proceedings. Thus, it can be concluded that, the Ld. AO has justifiably invoked the provisions of Section 68 and accordingly, the addition of Rs. 23 Lacs made by the AO found to be on right footing, thus, the same qualifies to be confirmed. We, Accordingly, set aside the order of Ld. CIT(A) to the extent of Rs. 23/- Lacs received from M/s Moon Shine Mercantile Pvt. Ltd. and restore the addition made by the Ld AO to that extent. Decided partly in favour of assessee.
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