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The Tax Publishers Wellman Wacoma Ltd. v. Jt. CIT [ITA No. 1229/Kol/2012, dt. 13-4-2016] : 2016 TaxPub(DT) 2175 (Kol-Trib) Addition under section 68 for share capital *Facts:* Assessee public limited company had allotted shares to 9 applicants, 2 of the same was found to be alright, on doubts rest 7 allotments was held as unexplained credits under section 68 and added back. On appeal Commissioner (Appeals) upheld the addition under section 3 of the Benami transactions prohibition act 1988 where in it was found that the 7 shareholders had received monies from two companies Premium Agro exports Ltd. and Agarpara Jute mills Ltd. and then have invested in the assessee. Factually cheques favoring the assessee was issued by the two companies to the a/c of the seven shareholders. The seven shareholders were all private limited companies with their averments duly produced before the ITAT. The fact of the 7 companies have disclosed the investment in the asset side of their balance sheet was produced and amount borrowed from the two companies for the investment was shown as loans and advances, PAN nos. were also produced before the ITAT. On appeal by the assessee: Held in favour of the assessee that the section 68 addition and Benami act invocation was incorrect.

The Tax Publishers

Wellman Wacoma Ltd. v. Jt. CIT [ITA No. 1229/Kol/2012, dt. 13-4-2016] : 2016 TaxPub(DT) 2175 (Kol-Trib)

Addition under section 68 for share capital

Facts:

Assessee public limited company had allotted shares to 9 applicants, 2 of the same was found to be alright, on doubts rest 7 allotments was held as unexplained credits under section 68 and added back. On appeal Commissioner (Appeals) upheld the addition under section 3 of the Benami transactions prohibition act 1988 where in it was found that the 7 shareholders had received monies from two companies Premium Agro exports Ltd. and Agarpara Jute mills Ltd. and then have invested in the assessee. Factually cheques favoring the assessee was issued by the two companies to the a/c of the seven shareholders. The seven shareholders were all private limited companies with their averments duly produced before the ITAT. The fact of the 7 companies have disclosed the investment in the asset side of their balance sheet was produced and amount borrowed from the two companies for the investment was shown as loans and advances, PAN nos. were also produced before the ITAT. On appeal by the assessee:

Held in favour of the assessee that the section 68 addition and Benami act invocation was incorrect.