TMI Blog2021 (1) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Per J. Sudhakar Reddy , AM This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-13, Kolkata, [hereinafter the CIT(A) ], passed u/s. 250 of the Income Tax Act, 1961 (the Act ), dated 04.09.2020 for the Assessment Year 2012-13. 2. The assessee is a company and is in the business of dealing and trading in commodities and commodity derivatives through recognised exchanges. During the year it filed its return of income declaring total income of Rs. 16,64,635/-. The AO in the assessment order records that this profit is in accordance with the market position. 2.1. During the year, the assessee issued one 1,25,000 shares of ₹ 10/- each at a premium of ₹ 190/-. The assessee filed details of share capital raised along with the names and the addresses of the shareholders, their PAN, IT acknowledgement of filing of return, copy of bank statement, copy of the audited accounts, copy of returns filed with ROC returns as well as copy of the minutes recorded for allotment of shares at the board meetings, when the AO, during the course of assessment proceedings, called for these details. Thereafter the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the directors who appeared had educational qualifications of Higher Secondary, Matriculation and Graduation and were in business and hence, it is not correct to say that these persons have no credibility. It was further submitted that the net worth of these companies and the investment made by these companies in the assessee company justify the transactions. He further justified the premium of ₹ 190/- charged by the assessee company by pointing out to high turnover of the assessee company and the profits earned by it. He took this Bench through the facts and figures of turnover and profits earned in the last few year to justify the share premium charged. He relied on case law in support of his contention that the addition is bad in law. We will refer to these case law as and when necessary. 2.3. The ld. CIT(A) relied on certain case laws and specifically on the decision of the Hon ble Supreme Court in the case of Pr. CIT (Central-1) vs. NRA Iron Steel Pvt. Ltd. arising out of SLP (Civil) No. 29855 of 2018 and uphold the order of the AO. Aggrieved, the assessee is in appeal before us. 3. Rival contentions heard. On a careful consideration of the facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The AO as well as the ld. CIT(A) have not, in this case doubted the identity of the shareholder or the capacity of the shareholder company. Their only doubt is on the genuineness of the transaction and that too because in their view the share premium of ₹ 190/- charged is high. This is factually incorrect. The turnover of the assessee company is ₹ 17.01 crores for the AY 2012-13 and ₹ 13.85 crores for AY 2011-12. The profits declared are ₹ 23.01 lakhs for AY 2012-13 and ₹ 20.10 lakhs for AY 2011-12. 4.2. The legal issue that arises is whether such an addition is sustainable in law as what was brought to tax was only the share premium. 4.3. We now discuss the case law on this issue. The ITAT Kolkata Bench in the case of ITO vs. M/s. Savera Towers Pvt. Ltd. in ITA No. 2275/Kol/2016 for the AY 2012-13 order dated 05/12/2018 held as follows: 6. We have heard the rival submissions. The facts stated hereinabove remain undisputed before us by either of the parties and hence the same are not reiterated for the sake of brevity. At the outset, we find that the assessee had received share capital of ₹ 54,200/- from 4 corporate entities and & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of Hon ble Bombay High Court in Pr. CIT vs. Apeak Infotech reported in 88 Taxmann.com 695 dt 08.06.2017 wherein the question raised before the Hon ble Bombay High Court are as under: A. Whether on the facts and circumstances of the case and in law, the Tribunal was correct to uphold the decision on Commissioner of Income Tax (Appeals) that the share premium received by the assessee-company cannot be taxed u/s 68 of the Act ignoring the ratio laid down by this Court in its decision reported in the case of Major Metals Ltd. vs. Union of India [2013] 359 ITR 450 (Bom)? B. Whether on the facts and circumstances of the case and in law, the Tribunal as well as the Commissioner of Income Tax (Appeals) was right in deleting addition made by the AO, by holding that the share premium receipt is capital in nature? The Hon ble Court held as under: Regarding Question A: (a) The issue raised by the Revenue in this question is to bring to tax the share premium received u/s 68 of the Act. We find that the issue of bringing the share premium to tax u/s 68 of the Act was not an issue which was urged by the appellant Revenue before the Tribunal. The only issue which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 at premium at ₹ 990 per share. It was this finding of the fact arrived at by the Settlement Commission which was not disturbed by this court in its writ jurisdiction. In the present case the person who have subscribed to the share and paid share premium have admittedly made statement on oath before the AO as recorded by the Tribunal. No finding in this case has been given by the authorities that shareholder/share applicants were unidentifiable or bogus. (e) In the above view Question No. A is not being entertained in view of the decision in Tata Chemical Ltd. (supra). Accordingly, the question (A) is not entertained. Regarding Question B: (a) We find that the impugned order of the Tribunal upheld the view of the Commissioner of Income-tax (Appeals) to hold that share premium is capital receipt and therefore, cannot be taxed as income. This conclusion was reached by the impugned order following the decision of this court in Vodafone India Services (P.) Ltd. (supra) and of the apex court in G. S. Homes and Hotel (P.) Ltd. (supra). In both the above cases the court has held that the amount received on issue of share capital including premium are on capital account an ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
