IN THE ITAT, VISAKHAPATNAM BENCH
V. DURGA RAO, J.M. & D.S. SUNDER SINGH, A.M.
S.V.N. Hotels & Resorts (P) Ltd. v. ITO
I.T.A. No. 521/Viz/2018
25 September, 2020
Appellant by: D. Balaji, Authorised Representative
Respondents by: D. K. Sonowal, Commissioner Departmental Representative
D.S. Sunder Singh, A.M.
This appeal is filed by the assessee against the order of the Commissioner (Appeals) (Commissioner (Appeals))-1, Visakhapatnam in ITA No. 0059/2015-16/ITO/WD-1, VZM/2016-17, dated 26-7-2018 for the assessment year (A.Y.) 2012-13.
2. All the grounds of appeal are related to sustaining the addition made by the assessing officer (AO) under section 68 of the Income Tax Act, 1961 (in short 'Act').
3. The assessee filed the return of income declaring total income of Rs. 14,59,785 which was set off against the loss of earlier years. During the course of assessment proceedings, the assessing officer found that the assessee has allotted 3,00,000 equity shares of Rs. 10 each at a premium of Rs. 90 per share to M/s. Charansheela Consultants (P) Ltd., 2, Haralal Das lane, Jorabagan Park (W), Kolkata, West Bengal. The share capital of Rs. 3,00,00,000 comprises of share capital of Rs. 30,00,000 and the share premium of Rs. 2,70,00,000. The said amount of Rs. 3.00 crores was received by the assessee in the Financial Year (financial year ) 2008-09 and shares were allotted during the financial year 2011-12 relevant to the assessment year 2012-13. Therefore, the assessing officer asked the assessee to explain as to why the same should not be treated as income under section 68 of the Act. The assessee filed the details called for by the assessing officer such as copy of return of income of M/s. Charansheela Consultancy (P) Ltd. and financial statements explaining the source and the nature of transaction. The assessee objected for addition of Rs. 3.00 crores in the impugned assessment year, since, the assessee had received money through banking channels and duly recorded in the books of the assessee as well as the investor company and also objected for taxing the amount in assessment year 2012-13 against the actual receipt of money in the financial year 2008-09, relevant to the assessment year 2009-10. The assessing officer not being impressed with the explanation of the assessee made the addition of Rs. 3,00,00,000 under section 68 of the Act.