IStar Skill Development (P) Ltd. v. ITO [ITA No. 762/Bang/2018, dt. 19-10-2020] : 2020 TaxPub(DT) 4404 (Bang.-Trib.)

Additions on share premium sustained under section 56(2)(viib) -- Startup

Facts:

Additions were sustained for share premium received by the assessee who was a registered startup under section 56(2)(viib) by lower tax authorities. On higher appeal, assessee produced the registration of the startup, the submission of Form 2 as per the CBDT Circular thereby claiming immunity under section 56(2)(viib).

Held in favour of the assessee that their submissions of being a registered startup be considered/verified by Commissioner (Appeals) and drop the additions sustained.

Editorial Note: It is quite likely that many start up entities might have got notices under the act on similar basis. This decision will come to their rescue if the process was followed as per the discussed CBDT circular. Amidst many decisions on this section few have been seen on startup entities and their claim of immunity. This decision thus forms a guidance precedence.