| The Tax Publishers2021 TaxPub(DT) 1154 (Ind-Trib) INCOME TAX ACT, 1961
Section 68
Assessee-company was in the process of expansion and in order to meet the requirement of the banks for increasing the share capital, strengthening the debt equity ratio, assessee returned the funds back to firm, which, in turn, returned capital investment made by its partners, i.e., the subscriber companies. These companies, in turn, invested in share application of assessee-company. Accordingly, assessee discharged onus cast under section 68 to prove genuineness of transaction and creditworthiness of subscribers and therefore, no addition was called for.
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Income from undisclosed sources - Addition under section 68 - Receipt of share capital and share premium from three subscribers -
Assessee-company received share capital and share premium from three subscribers. AO being not satisfied with genuineness of transaction and creditworthiness of subscribers, made addition under section 68. Held: All the share applicants were part of group of assessee. Two out of three share applicants were existing shareholders of assessee and the third was HUF who was one of the directors of assessee. Various share applicants who had subscribed to share capital of assessee company were capable of doing so and this was established through their respective balance sheet and income-tax return. Assessee-company was in the process of expansion and in order to meet the requirement of the banks for increasing the share capital, strengthening the debt equity ratio, assessee returned the funds back to firm, which, in turn, returned capital investment made by its partners, i.e., the subscriber companies. These companies, in turn, invested in share application of assessee-company. Accordingly, assessee discharged onus cast under section 68 and, therefore, no addition was called for.
Relied:Vodafone India Services (P) Ltd. v. Addl. CIT (2014) 368 ITR 1 (Bom) : 2014 TaxPub(DT) 3959 (Bom-HC), Asstt. CIT v. Gagabdeep Infrastructuure (P) Ltd. ITA No. 5784/Mum/2011, dated 23-4-2014, CIT v. Lovely Exports (P) Ltd. (2009) 216 CTR 195 (SC) : (2009) 317 ITR 218 SC) : 2009 TaxPub(DT) 2027 (SC) and Green Infra Ltd. v. ITO (2014) 38 Taxmann.com 253 : 2014 TaxPub(DT) 101 (Mum-Trib), Order dated 23-8-2013.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
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