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2019 (8) TMI 1665 - ITAT KOLKATAAddition u/s 68 - whether the share application money with share premium against transfer of allotment of subscriber's investment in three other companies invite the mischief of the provisions of section. 68 of the Act or not? - HELD THAT:- We note that during the year the assessee company raised Share Capital of ₹ 1,53,250/- against issue of equity share of 15325 shares @ ₹ 10/- each at a premium of ₹ 1990/- each against handing over of investments in three other companies of the share applicant. Therefore, total share capital raised amounts to ₹ 3,06,50,000/-. We note that section 68 of the Act is not applicable on the facts of the case, since no money transaction took place between assessee and share subscribing companies. It is a simple case of shares being allotted in lieu of shares held by the share subscribers. Therefore, we note that it is just swapping of shares, i.e. one share is exchanged from another share and therefore section 68 does not attract in the assessee’s case under consideration. See M/S. SUNGLOW DEALCOM PRIVATE LIMITED. [2018 (11) TMI 1821 - ITAT KOLKATA] and M/S ANAND ENTERPRISES LTD. [2018 (9) TMI 1779 - ITAT KOLKATA. AO had erroneously invoked the provisions of section 68 of the Act to the facts of the instant case, which, in our considered opinion, are not at all applicable herein. This is a simple case of acquiring shares of certain companies from certain shareholders without paying any cash consideration and instead the consideration was settled through issuance of shares to the respective parties. That is, section 68 of I.T. Act, 1961 does not apply to cases of purchase of share assets and allotment of shares by the appellant when purchase and allotment are under a barter system. - Decided against revenue.
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