2021 (7) TMI 732 - AT - Income Tax

Addition on account of share application and share premium money u/s 68 - assessee has received share application and share premium money from eleven investor companies - HELD THAT:- We find that all money either on account of share application or share premium has been received during the financial year 2007-08, relevant to AY 2008-09. We further find that despite bringing this fact in the notice of lower authorities, the lower authorities treated this amount as unexplained cash credit and made the addition in the financial year 2008-09. Since no money either on account of share application or share premium is received in the current financial year, therefore the amount cannot be taxed in the financial year 2008-09 i.e,. relevant to AY 2009-10. We find that on similar set of facts and on similar contention the co-ordinate of this Tribunal in DCIT vs. Brijwasi Developers [2017 (5) TMI 1741 - ITAT SURAT] upheld the order of Ld. CIT(A) holding that the no amount can be taxed when no such amount were received during the current financial year.

Further the Hon’ble Bombay High Court in Ivan Singh Vs ACIT [2020 (2) TMI 850 - BOMBAY HIGH COURT] also held that when the credit in the account of the assessee was found in the books of account, so credit can be charged to the income of the assessee in that previous year and the said credit cannot be brought to tax in subsequent assessment year. Considering the aforesaid factual and legal discussions and respectfully following the order of Hon'ble High Court and coordinate bench of Tribunal, no addition can be made during the A.Y. 2009-10.

The case laws relied by Ld. DR for the revenue is not helpful to the department as all the case laws relates the validity of reopening on the basis of information from investigation wing of the department. On the contrary, we held that the share application money and premium was not received in the current financial year, which is the subject matter under appeal. Therefore, the assessee succeed.

Considering the fact that no addition on account of share application and share premium is sustainable in the year under consideration. Therefore, the addition on account of alleged commission payment is also not sustainable. - Decided in favour of assessee.