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2008 (1) TMI 581 - HC - Income TaxIncome- The assessee who is an employee of M/s. Manikya Plastichem Pvt. Ltd. as an individual filed return of income on July 1, 1996, for the assessment year 1996-97 declaring total income of Rs. 4,68,520. The return was processed under section 143(1)(a) of the Income-tax Act. During the course of assessment, it was noticed by the Revenue that M/s. Manikya Plastichem Pvt. Ltd. had issued 50,000 equity shares at a face value of Rs. 10 each to the assessee herein and in the same year the said company had issued 4,00,000 equity shares at Rs. 25 per share to TDICI. The Assessing Officer having found the difference in the market value of the shares allotted to the assessee, treated the difference amount of Rs. 15 per share as an escaped income. The Commissioner (Appeal) dismissed the appeal. The Tribunal held that the shares were allotted to the assessee as a promoter of the company and pursuant to an agreement, and set aside the order of the Commissioner (Appeals). Held that- the assessee was the employee of M. Though the Tribunal had given a finding that the shares had been allotted to the assessee by virtue of an agreement in favour of the assessee as a promoter of the company, he could not be considered as promoter of M. The assessee being an employee of the company having got shares at the rate of Rs. 10 each, had been benefited out of such allotment when the same shares were sold at the rate of Rs. 25 per share. Thus the Tribunal was not justified in allowing the appeal.
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