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2019 (10) TMI 1226 - AT - Income TaxAddition u/s 68 on account of share premium - violation under section 78 of the companies act in this case - HELD THAT:- Not only the assessee’s financial, do not justify the share premium the assessee has issued the share at premium of ₹ 2,490/- to one party and same shares have been issued without any premium to other party in same period. This certainly add, cogency in the observation of CIT(A) that in substance it is not share premium. We find that by referring to the non-compliance of section 78 of the Companies Act the learned commission of income tax has in substance referred to this aspect. The assessee has been evasive in its reply to the question of compliance of provisions of section 78 of the companies act. The assessee has submitted that this is an aspect which arises post receipt of the money. In other words assessee contends that it is not relevant. - assessee submits that the registrar of company has not passed any order against the assessee in this regard. We find that it is not the case of the assessee that he has submitted a confirmation from the registrar of company that in the facts of the present case there is no violation of provisions of section 78 of the companies act. We further find that in the order of the authorities below it has been mentioned that the provisions of section 78 has not been complied in as much as the share premium received has been used for investment in Future Generali India Insurance Company Ltd., a party which is a 40A(2)(b) company. However the assessee in this regard disputes that there is any violation. In our considered opinion on the facts and circumstances of this case this aspect needs to be remitted to the file of assessing officer. The assessing officer is directed to examine in detail this aspect as to whether there is violation of the companies act with regard to the utilisation of share premium account. Thereafter he shall decide as per law Needless to add the assessee should be granted adequate opportunity of being heard. - Appeals filed by the revenue are allowed for statistical purposes.
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