TMI Blog2019 (1) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... see since the assessee is a public listed company. The consideration of the totality of above facts and circumstances lead us to inevitable conclusion that Ld. CIT(A) was justified in providing relief to the assessee in terms of catena of judicial pronouncements as discussed in the impugned order. Finding no infirmity in the same we dismiss the appeal. - Decided against revenue - I.T.A. No.1096/Mum/2016 - - - Dated:- 2-1-2019 - SHRI MAHAVIR SINGH, JM AND AND SHRI MANOJ KUMAR AGGARWAL, AM For The Assessee : Prakash Jhunjunwala Abhishek Jhunjunwala- Ld. ARs For The Revenue : Purushottam Tripuri - Ld.CIT-DR ORDER Per Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year [AY] 2011-12 agitate the order of Ld. Commissioner of Income-Tax (Appeals)-4, Mumbai, [CIT(A)], Appeal No. CIT(A)-4/IT-02/ITO.2(1)(1)/2014-15 dated 11/12/2015 on following sole ground of appeal: - Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition made in the assessment order even though the assessee had not discharged the onus to prove the genuineness of the investment made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was ₹ 9.37 only whereas the shares were issued at much higher prices. Consequently, the assessee, in terms of Section 68, was required to explain the nature and source of the transactions. Since the assessee, in the opinion of Ld. AO, could not justify the excessive share premium qua intrinsic value of shares and the nature and source of credit entries remained unexplained, the provisions of Section 68 were applicable to the assessee. The Ld. AO also made certain observations on the bank accounts of the share applicants which have already been given on page numbers 7 8 of the quantum assessment order. Finally, after relying upon certain judicial pronouncements, the aforesaid amount of ₹ 19.80 Crores was treated as unexplained cash credit u/s 68 and added to the income of the assessee. 3.1 Aggrieved, the assessee contested the same with success before Ld. CIT(A) vide impugned order dated 11/12/2015 wherein the assessee, vide elaborate submissions and relying upon several judicial pronouncements submitted that the primary ingredients of Section 68 were fulfilled by the assessee and therefore, additions were not justified. The submissions of the assessee has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f share-holders. Further, the assessment order of one share holder M/s Handful Investrade Pt Ltd had been completed u/s.143(3) of I.T. Act, thus transactions made by such company with the appellant cannot be treated as non-genuine. All share-holders had confirmed the transactions entered with the appellant and filed documents to prove their investments made in shares of appellant company. Ld. Assessing Officer has not able refer to any adverse evidence. The quoted price of the shares of appellant company listed in Bombay stock Exchange at end of the year as on 31/3/2011 is disclosed of ₹ 37.70 per share against which the appellant during December, 2010 had issued the share on preferential basis @ ₹ 20 per share. The AO had not found any fault in the documents and is therefore not justified in brushing aside the documents filed by appellant. The AO-had not brought any contrary documentary evidence to disprove the transaction and had not established that the appellant had introduced its unaccounted money in garb of share capital/premium. Accordingly, I hold that the addition made in assessment of share capital and share premium money of ₹ 19,80,00,000/- cannot be su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the same. It has further been submitted that the provisions of Section 56(2)(viib) were not applicable to the assessee since the assessee was a public company. 5.1 We have carefully heard the rival contentions and perused relevant material on record including written submissions / documents placed in the paper-book judicial pronouncements cited before us. Some undisputed facts to be noted are that the assessee is a public listed company and the made preferential allotment of shares having face value of ₹ 10/- per share to as many as 49 investors at a premium of ₹ 10/- per share. The Ld. AO has doubted the valuation of shares on the premise that the market value was much lower than the issue price and the financials of the company did not justify issue of shares at high premium. However, we find that nothing in law prohibits issue of shares at prices higher than the prevailing market prices. The revenue, by questioning the wisdom of the investor, could not make addition in the hands of the assessee as unexplained cash credit u/s 68 unless it was established that the assessee s unaccounted money was routed in the books through the mechanism of fictitious share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO to make the additions in the hands of the assessee on the basis of subsequent price manipulation in the market. The Ld. AO has doubted the transactions primarily by questioning the high share premium. However, to reiterate, the revenue, by questioning the wisdom of the investor, could not make addition in the hands of the assessee as unexplained cash credit u/s 68 unless it was established that the assessee s unaccounted money was routed in the books through the mechanism of fictitious share allotment. Nothing on record establishes this fact. 5.4 So far as the nature of proviso to Section 68 as introduced by Finance Act, 2012 with effect from 01/04/2013 is concerned, the same has aptly been settled by jurisdictional Bombay High Court in CIT Vs. Gagandeep Infrastructure Private Limited [80 Taxmann.com 272] wherein it has been held as under: - ( e ) We find that the proviso to section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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