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Tax Publishers
Hindustan Coca Cola Beverages (P) Ltd. v. DCIT
[ITA No. 4261/Del/2006, ITA No. 236/Del/2007, dt. 19-10-2020] : 2020 TaxPub(DT)
4402 (Del.-Trib)
Share premium utilized to wipe of accumulated losses under
court approval -- Taxability under MAT
Facts:
Assessee who had huge accumulated losses duly with court
approval as per capital reduction provisions of Companies Act, 1956 utilized
share premium in their balance sheet for writing off Rs. 2086.14 crores losses
on the face of the balance sheet. It was the revenue's contention that the same
should have been routed via P&L Account and the said share premium would
have become taxable under MAT as well. On higher appeal the first appellate
authority dropped the additions. On higher appeal by the department --
Held against the revenue (in favour of the assessee) the
share premium could not be brought into MAT computation.
Editorial Note: The
quantum in the appeal and the plea of the department is what makes it a one-off
case.
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