TMI Blog2017 (8) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence issue need not be examined under section 68 of the Act. Ld. CIT(A) thus came to conclusion that prize of shares fixed by virtue of agreements are mutually agreed between two parties. Further, there is a categorical finding by Ld. CIT(A) that issue of share capital was a source of funding and not a case of transfer of any undertaking which could attract provisions of section 50A or 50B of the Act. Share premium received by assessee from Mauritius Company has to be considered as capital receipt. See case of Vodafone India services private limited [2014 (10) TMI 278 - BOMBAY HIGH COURT] - Decided against revenue - ITA No. 1995/Del/2014 - - - Dated:- 27-4-2017 - SH. N. K. SAINI, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s share holding? 5. That the order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law. 6. That the grounds of appeal are without prejudice to each other. 7. That the appellant craves leave to add, alter, amend or forgo any ground (s) of the appeal raised above at the time of the hearing. 2. Brief facts of the case are as under: Assessee filed its return of income for year under consideration on 29.09.2008, declaring total income of rupees Nil . The return was processed under section 143(1) and case was subsequently selected for scrutiny and notices under section 143(2) was issued and served upon assessee. Detailed questionnaire alongwith notice under section 143(2) and 142(1) was served upon a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A). 9. We have perused findings of Ld. CIT(A) as well as submissions advanced by both sides. All the grounds raised are interrelated and being common issue, the same are being disposed of together 10. It is pertinent to note that Ld. CIT(A) had referred issue to FT TR Division of Department for verifying transaction through Competent Authority of Government of Mauritius. It has been observed by Ld. CIT(A) that investigation report forwarded by FT TR division does not indicate any non- genuine transaction in this case. He further observes that assessing officer has not questioned genuineness of transaction and hence issue need not be examined under section 68 of the Act. Ld. CIT(A) thus came to conclusion that prize of shares fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 in the case of DCIT Vs. Hooghly Dock Port Engineers Ltd. wherein the receipt under equity capital has been considered as capital receipt. Since, the amount received as the shares premium is in the nature of capita receipt, the same cannot be treated as Income from other sources' (even indirectly u/s 68 as held by AO) in view of the decision in the case of CIT Vs. Steller Investment Ltd. 115 Taxman 1999 and CIT Vs. Sophia Finance Ltd. 70 Taxman 1969. 4.6 The premium on issue of shares is capital receipt and it cannot be taxed as revenue income under any circumstances. In judicial pronouncement mentioned above, it is emphasized that share capital being in the nature of a capital receipt; it cannot under any circumstances be tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated to issuance of share capital which is the source of Funding and not a case of transfer of any undertaking or part of undertaking so as to attract provisions of section 50A and/or 50B as erroneously done by the AO. So far as the appellant is concerned it raised its bank balance when it received the capital contribution. There was no transfer of any asset by the assessee to any person. This is a case of allotment. Allotment of share is not included within the definition of transfer u/s 2(47) of the Act. 11. Hon ble Bombay High Court in the case of Vodafone India services private limited in WP No. 871 of 2014, vide order dated 10.10.2014 had observed that: The amount received on issue of shares is admittedly a capital acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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