The Tax Publishers2021 TaxPub(DT) 0651 (Kol-Trib) : (2021) 085 ITR (Trib) 0297

INCOME TAX ACT, 1961

Section 68

Assessee-company by furnishing relevant details proved identity and creditworthiness of investors and genuineness of transaction of receipt of share capital inclusive of securities premium and justification of share premium with reference to earnings per share capitalisation method and net asset value method, therefore, AO was not justified in making addition under section 68 on the allegation that no business activity had been carried on justifying the huge amount.

Income from undisclosed sources - Addition under section 68 - Receipt of share capital along with premium -

Assessee-company raised share capital inclusive of securities premium AO took the view that no business activity had been carried on justifying the huge premium and, therefore, AO made addition under section 68. Held: Assessee-company by furnishing Investor-wise details of increase in share capital such as name of investor; Date of receipt, Bank statement of investor and, Bank statement of assessee, Details of utilization, Authorized share capital, Form 2, Form 20B, Form 23AC, Form 5, Date of allotment, Number of shares allotted, Amount of share capital, and Amount of share premium, Justification of share premium with reference to net asset value such as Net asset value as at 1-4-2011, EPS per share and Issue price; Justification of share premium with reference to EPS Documents in support of the identity and creditworthiness of the share capital and genuineness of the transaction such as Company master data, Signatory detail, Certificate of incorporation, Statement of source of fund, Permanent account number card, Acknowledgement of return of income and Audited financial statement proved identity and creditworthiness of investors and genuineness of transaction and justification of share premium with reference to earnings per share capitalisation method and net asset value method, therefore, AO was not justified in making addition under section 68.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13



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