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2018 (12) TMI 575 - AT - Income TaxRevision u/s 263 - addition u/s 68 - genuineness of the share capital received by the assessee from the Mauritian company - Held that:- We agree with the assessee, that the credit standing in the name of the investor who is a non resident, the onus to explain the source of the source did not lay with the assessee, as per section 68. AO on being satisfied with the genuineness of the transaction, being carried out through banking channels, was not required to inquire into the source of the source and therefore the inquiry could not be said to be inadequate on this count. We hold that the satisfaction of the AO regarding the genuineness of the share capital received by the assessee from the Mauritian company was reasonable considering the documents filed and more importantly considering the fact that on the basis of identical documentation the I.T.A.T. had held identical transaction to be genuine in the case of a company which the assessee company was subsequently was amalgamated with. CIT has not pointed out why any further enquiry was required to be made. It is not a case where any infirmity has been pointed out in the documents submitted by the assessee or for that matter, the huge share premium has not been justified. If that be the case then of course, the satisfaction of the Assessing Officer could not said to be reasonable and definitely in such a case the enquiry of the AO would have been clearly deficient. That exactly is the fact and situation in which the Hon'ble Apex Court and various other courts have upheld the order passed u/s 263 of the Pr. CIT in various cases cited by the Revenue before us. But in the present case, the identity, the genuineness and even the share premium received has been established and justified. No reason remains for doubting the transaction. CIT has rested his case for more inquiry in the matter, merely on the basis of suspicion that the transaction may be tainted. This we hold, cannot be the basis for holding the enquiry conducted by the AO as insufficient and the order consequently passed as erroneous for the purpose of assuming jurisdiction u/s 263 of the Act. - Decided in favour of assessee.
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