Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 841 - AT - Income TaxAddition u/s 68 - addition in share capital and share premium, identity and creditworthiness of the share holders, valuation report - Assessee has failed to discharge its onus of proving the identity and creditworthiness of the investors and genuineness of the transaction - HELD THAT:- Admittedly during the relevant year no cash was actually infused in the fund flow of company. There was mere dressing of accounts. As for the purpose of invoking Section 68 in the case of VR Global Energy Pvt. Ltd. [2018 (8) TMI 866 - MADRAS HIGH COURT] has held that where the assessee allotted shares to a company in settlement of pre-existing liability of assessee to the said company by way of adjustment and since no cash was involved in transaction of said allotment of shares, conversion of these liabilities into share capital and share premium could not be treated as unexplained cash credit u/s 68 of the Act. It was held that since the cash credits towards share capital were only by way of book adjustment and not actual receipts, therefore, the same could not be treated as receipt towards share subscription money. Since no cash was involved in transaction of said allotment of shares, conversion of these liabilities into share capital and share premium could not be treated as unexplained cash credits u/s 68. - Decided in favour of assessee. Allowable expenditure u/s 37(1) - HELD THAT:- As there is no matter on record to suggest that the expenses were examined on the basis of actual expenditure corroborated by evidence. Therefore the issue in regard to the disallowance of expenses is restored to the files of the ld AO with a direction to evaluate the genuineness of the expenses on actual expenditure basis and then pass fresh assessment order. Accordingly ground allowed in favour of the Assessee for statistical purposes.
|