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The Tax Publishers DCIT v. Overseas Infrastructure Alliance (I) (P) Ltd. [ITA No. 1470/Mum/2011, dt. 30-3-2016] : 2016 TaxPub(DT) 2176 (Mum-Trib) Share capital addition as unexplained cash credit *Facts:* Assessee was found to have increased share capital by Rs.14 crores by way of shares issued to 3 private companies who had very limited and negligible activity. No ROC fee was seen, majority was received as share premium. Only exchange of Rs. 60 lakhs cheque was seen in the bank account. Thus the entire share capital was held under section 68 as unexplained cash credit. Commissioner (Appeals) reversed the addition holding that the 3 companies had subscribed to redeemable preference shares and on the same day the assessee also invested in the redeemable preference shares of these 3 companies thus there was only exchange of cheque for the net difference. The identity and the genuineness of the parties were also proven. On further appeal by the department: Held in favour of the assessee that the Rs. 14 crore addition cannot be sustained and the order of the Commissioner (Appeals) required no revision. *Note:* Modus operandi is interesting.

The Tax Publishers

DCIT v. Overseas Infrastructure Alliance (I) (P) Ltd. [ITA No. 1470/Mum/2011, dt. 30-3-2016] : 2016 TaxPub(DT) 2176 (Mum-Trib)

Share capital addition as unexplained cash credit

Facts:

Assessee was found to have increased share capital by Rs.14 crores by way of shares issued to 3 private companies who had very limited and negligible activity. No ROC fee was seen, majority was received as share premium. Only exchange of Rs. 60 lakhs cheque was seen in the bank account. Thus the entire share capital was held under section 68 as unexplained cash credit. Commissioner (Appeals) reversed the addition holding that the 3 companies had subscribed to redeemable preference shares and on the same day the assessee also invested in the redeemable preference shares of these 3 companies thus there was only exchange of cheque for the net difference. The identity and the genuineness of the parties were also proven. On further appeal by the department:

Held in favour of the assessee that the Rs. 14 crore addition cannot be sustained and the order of the Commissioner (Appeals) required no revision.

Note: Modus operandi is interesting.