| The Tax Publishers2019 TaxPub(DT) 1476 (Kol-Trib) INCOME TAX ACT, 1961
Section 68
Once receipt of share capital had been accepted as genuine within the ken of section 68 there was no reason for AO to doubt share premium component received from the very same shareholders as bogus in view of the fact that assessee had duly discharged burden cast on it to prove genuineness of transaction and identity and creditworthiness of share subscribers.
|
Income from undisclosed sources - Addition under section 68 - Receipt of share premium - Assessee having proved identity, creditworthiness and genuineness aspects
Assesse-company received share capital along with premium. AO took the view that as there was no substantial business activity carried on by assessee, the company could not command huge share premium. Assessee furnished various evidences to substantiate receipt of share premium, however, AO subjected premium component to addition under section 68 on the ground that assessee could not produce directors of share subscribing companies. Held: Assessee had furnished plethora of evidences like copies of income-tax return acknowledgement of shareholders, statement of source of funds, audited financial statements, copies of relevant bank statements in respect of acounts from which share application monies were paid, PAN, address of share subscribers, etc. Also, assessee had filed certificate of incorporation of all the shareholders companies together with share allotment letters issued to them. All the share subscribers were duly assessed to income-tax and transaction with assessee company were duly routed through banking channels and were duly reflected in their respective audited balance sheets. Therefore, assessee had duly discharged onus cast on it to prove genuineness of transaction and identity and creditworthiness of share subscribers once receipt of share capital had been accepted as genuine within the ken of section 68 there was no reason for AO to doubt share premium component received from the very same shareholders as bogus. Accordingly, addition made under section 68 could not be sustained merely for the reasons that assessee could not produce directors of share subscribing companies.
Relied:CIT v. Orissa Corporation Pvt. Ltd. (1986) 159 ITR 78 (SC) : 1986 TaxPub(DT) 1425 (SC). Distinguished:Novo Promoters and Finelease Pvt. Ltd. (2012) 342 ITR 169 (Del) : 2012 TaxPub(DT) 1558 (Del-HC).
REFERRED : Pr. CIT v. Apeak Infotech (2017) 88 Taxmann.com 695 (Bom) : 2017 TaxPub(DT) 4092 (Bom-HC), dt. 8-6-2017.
FAVOUR : In assessee's favour.
A.Y. : 2012-13
IN THE ITAT, KOLKATA BENCH
 SUBSCRIBE FOR FULL CONTENT
|