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2021 (5) TMI 349 - ITAT MUMBAIAddition on account of share premium received by the assessee u/s 56(1) - income from other sources - HELD THAT:- We hold that receipt of share premium per se cannot be treated as income or the revenue receipt. We hold that in order to bring a particular receipt to be taxable within the ambit of Section 56(1) of the Act, the receipt should be in the nature of income as defined in Section 2(24) of the Act. We find that the share premium received by the company admittedly forms part of share capital and shareholders funds of the assessee company. When receipt of share capital partakes the character of a capital receipt, the receipt of share premium also partakes the character of capital receipt only. Hence, at the threshold itself, the receipt in the form of share premium cannot be brought to tax as the revenue receipt and consequently treat the same as income u/s.56(1). With regard to yet another observation made by the ld. AO in his order that receipt of premium was akin to gift and hence taxable u/s.56(1) we find that receipt of share capital and share premium is normal in case of a limited company and the same at any stretch of imagination cannot be equated with gift. Moreover, gift can be received only by individuals or HUFs and cannot be received by a company. Hence, this observation made by the ld. AO is dismissed in limine. With regard to yet another observation made by the ld. AO that assessee had acquired certain intangible assets at the time of acquisition of business and those intangible assets were impaired in the same year and that this fact itself proves malafide intention of the assessee for allotment of shares at a premium. We are unable to persuade ourself to accept to this contention of the ld. AO in view of the fact that though the assessee had acquired certain intangible assets while acquiring business, and though the said intangible assets had been written off during the year due to impairment, we find that assessee company had not claimed the same as deduction. Hence, the relevant observation of the ld. AO in this regard is baseless and devoid of any merit. In the instant case, we find the addition has been admittedly made by the ld. AO u/s.56(1) of the Act and no such enquiries doubting the genuineness of the transactions or the genuineness of the investors were doubted by the ld. AO in the instant case. Hence, the decision relied by the ld. DR, in our considered opinion, would not advance the case of the revenue. We find that all the necessary documents relating to the allotment of shares with premium together with relevant documentary evidences were indeed submitted by the assessee before the ld. AO which are not doubted at all. CIT(A) had rightly deleted the addition made u/s.56(1) of the Act on account of receipt of share premium for the A.Y.2011-12. Ground raised by the Revenue are dismissed.
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