https://www.taxtmi.com/caselaws?id=310622 ITAT Rajkot held that share capital and premium received by assessee company cannot be treated as unexplained cash credit under Section 68. The company was formed by converting a proprietary concern, with eight parties' advances converted to share capital. Since the original loan credits were accepted in the proprietor's assessment under Section 153A, their conversion to share capital cannot be questioned. For remaining investors, adequate documentation including PAN, ITR, and share allotment letters were provided, and investors responded to AO's notices. Non-issuance of physical share certificates and non-declaration of dividend in the first year of operations cannot invalidate genuine share capital transactions. Regarding bogus purchases, ITAT upheld CIT(A)'s decision to restrict addition to 0.24% instead of AO's 6% on unregistered dealer purchases, considering assessee's declared gross profit of 5.76%. en-us Fri, 24 Feb 2023 00:00:00 +0530 Thu, 02 Nov 2023 19:17:11 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=310622 ITAT Rajkot held that share capital and premium received by assessee company cannot be treated as unexplained cash credit under Section 68. The company was formed by converting a proprietary concern, with eight parties' advances converted to share capital. Since the original loan credits were accepted in the proprietor's assessment under Section 153A, their conversion to share capital cannot be questioned. For remaining investors, adequate documentation including PAN, ITR, and share allotment letters were provided, and investors responded to AO's notices. Non-issuance of physical share certificates and non-declaration of dividend in the first year of operations cannot invalidate genuine share capital transactions. Regarding bogus purchases, ITAT upheld CIT(A)'s decision to restrict addition to 0.24% instead of AO's 6% on unregistered dealer purchases, considering assessee's declared gross profit of 5.76%. Case-Laws Income Tax Fri, 24 Feb 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=310622