TMI Blog2019 (9) TMI 1622X X X X Extracts X X X X X X X X Extracts X X X X ..... r Shri Aloke Nag, Addl. CIT, Sr. D/R, appeared on behalf of the revenue. Shri Manish Tiwari, FCA, appearing on behalf of the assessee. ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by the revenue is directed against the order of the Learned Commissioner of Income Tax (Appeals)-4, Kolkata, (hereinafter the ld. CIT(A) ), dt. 30/09/2016, passed u/s 250 of the Income Tax Act, 1961 (hereinafter the Act ), relating to Assessment Year 2012-13. 2. The assessee is a company and has filed its return of income for the Assessment Year 2012-13 on 28/09/2012, declaring Nil income (Loss for ₹ 12,660/-). The Assessing Officer completed the assessment u/s 143(3) on 12/03/2015 adding an amount of ₹ 1,40,21,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olders, all of whom are corporate bodies and each and every one of them was assessed to tax and the premium in question was substantiated by the assessee. He relied on the number of case-law, for the proposition that, part of the sum received cannot be added u/s 68 of the Act. 6. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- 7. This is a case, where the Assessing Officer has accepted the share capital raised by the assessee at its face value. The only addition made was of share premium on the ground that this is excessive. In other words, the identity of the share hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Ld. CIT(A) had placed heavy reliance on these documents and had granted relief to the assessee. All the share subscribers are duly assessed to income tax and the transaction with the assessee company are duly routed through banking channels and are duly reflected in their respective audited balance sheets which are also placed on record before us. In any case, once the receipt of share capital has been accepted as genuine within the ken of section 68 of the Act, there is no reason for the ld. AO to doubt the share premium component received from the very same shareholders as bogus. We held that all the three necessary ingredients of section 68 had been duly complied with by the assessee with proper documentary evidences. We find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision 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 Assessing Officer, 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 under section 68 of the Act. We find that the issue of bringing the share premium to tax under section 68 of the Act was not an issue which was urged by the appellant Revenue before the Tribunal. The only issue which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uineness of the investment. Therefore, admittedly, the Assessing Officer did not invoke section 68 of the Act to bring the share premium to tax. Similarly, the Commissioner of Income-tax (Appeals) on consideration of facts, found that section 68 of the Act cannot be invoked. In view of the above, it is likely that the Revenue may have taken an informed decision not to urge the issue of section 68 of the Act before the Tribunal. (d) We may also point out that decision of this court in Major Metals Ltd. v. Union of India [2012] 19 taxmann.com 176/207 Taxman 185/[2013] 359 ITR 450 Bom. proceeded on its own facts to uphold the invocation of section 68 of the Act by the Settlement Commission. In the above case, the Settlement Commission ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther pertinent to note that the definition of income as provided under section 2(24) of the Act at the relevant time did not define as income any consideration received for issue of share in excess of its fair market value. This came into the statute only with effect from April 1, 2013 and thus, would have, no application to the share premium received by the respondent/assessee in the previous year relevant to the assessment year 2012-13. Similarly, the amendment to section 68 of the Act by addition of proviso was made subsequent to previous year relevant to the subject assessment year 2012-13 and cannot be invoked. It may be pointed out that this court in CIT v. Gagandeep Infrastructure (P.) Ltd. [2017] 80 taxmann.com 272/247 Taxman 245/39 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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