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2018 (5) TMI 849 - AT - Income TaxAddition being share capital and premium by invoking the provisions of 68 - no proof of identity and creditworthiness of all the new shareholders as well genuineness of transaction of raising share capital - Held that:- The perusal of the financial statements does not reveal that these companies are into any organised business of certain magnitude while perusal of the financial statements typically reveals and points towards peculiarity of being typical a shell companies which instead of doing any genuine business are undertaking huge voluminous movement of money from one entity to another entity. The assessee is not able to prove creditworthiness of these three investing companies and genuineness of these transactions of issuing share capital of ₹ 300 lacs( inclusive of share premium )by the assessee company could also not be proved and the additions were rightly made by the AO within deeming fiction of Provisions of Section 68 of the Act. Merely saying that return of allotment in form no 2 was filed with the Ministry of Corporate Affairs or Resolutions were passed by the assessee or these companies have Corporate Identification Numbers is not sufficient as these are merely ministerial/administrative functions which needs to be done in any case by all the companies allotting shares but the moot question is as to the creditworthiness of these three new share holders to invest such a huge amount of ₹ 300 lacs in assessee company as well whether these share transactions raising ₹ 300 lacs from these three new shareholders at huge valuation/share premium were genuine and justified which we have wide detailed reasoning above held otherwise. Additions confirmed - Decided against assessee.
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