Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 1948 - AT - Income TaxAddition u/s 68 - Unexplained share capital along with the share premium - burden of proofs viz. identity of the creditor, his creditworthiness and genuineness of the transaction u/s.68 - CIT-A deleted the addition - HELD THAT:- As the net owned funds of each share applicant were several times more than the investment made in equity of the assessee. It is evident that each share applicant had substantial resources of their own compared with the total investible funds available with each share applicants and that investment made in the equity shares and the assessee company was not significant. We note that the AO did not point out any defect or infirmity in the documents placed on record by the assessee as well as the share subscribers. Thus the creditworthiness of the aforesaid share subscribers cannot be disputed. Assessee had produced the aforesaid documents to explain the nature and source of the share capital along with share premium of the four corporate shareholders. We note that the AO had accepted the share capital subscribed by these four corporate entities. However, without pointing out any defects has arbitrarily without giving any reason by a cryptic order has added the entire share premium which was also given by the very same four corporate entities u/s 68 of the Act. The Ld. AR brought to our notice that the similar additions were made by the same very AO in five cases wherein the AO accepted the share capital but added the share premium which action of the AO was not upheld by the Tribunal. As share premium cannot be added in the hands of the assessee u/s. 68 of the Act since the proviso was inserted u/s 68 of the Act only from AY 2013-14 and similar additions made only on share premium was directed to be deleted and which action has been upheld by the Hon’ble Bombay High Court in Pr. CIT Vs. Apeak Infotech [2017 (9) TMI 1590 - BOMBAY HIGH COURT] - Decided in favour of assessee.
|