TMI Blog2024 (3) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... premium of Rs. 990/-. The net worth or the book value as per share as per books of account of the assessee was 212/- per share whereas the assessee was issued shares at a premium of Rs. 990/-. We also note that the assessee company was incorporated in 2007 and over a period of four years the value of shares was increased by 20 times and it is only based on this growth trajectory and potential of the assessee, equity shares have been prised at Rs. 1,000/- each inclusive of premium of Rs.990/-. Provisions of Section 56(2)(viib) of the Act are effective from AY 2013-14 and are not applicable to the year under consideration. We find that the assessee has filed all the evidences as stated above consisting of copies of ITRs, audited accounts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was selected for scrutiny and notices were duly issued and duly served on the assessee. During the course of assessment proceedings, the AO observed from the balance sheet that the assessee has issued 2,80,000 equity shares of face value of 10/- each at a premium of Rs. 990/-. Accordingly the AO called upon the assessee to furnish details in respect of share capital/share premium and justify the amount of premium received from five subscribers by referring the information received from Directorate of Investigation Wing vide letter dated 28.11.2014 regarding accommodation entries provided to the assessee company. The AO issued summons u/s 131 of the Act on 03.03.2015 to all the parties however none appeared. Accordingly the AO show caused th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny has returned income of more than Rs. 2.00 crores however the AO disbelieved the explanation of the assessee and without carrying out any investigation on the evidences filed by the assessee treated this amount of unexplained cash credit and added the same to the income of the assessee. 5. The Ld. CIT(A) simply affirmed the order of AO by observing and holding as under: The Hon ble ITAT has discussed the issue in detail in the case of ITO, Ward-5(3), Kolkata vs. M/s Blessings Commercial Pvt. Ltd. in ITA No. 271/Kol/2014 for AY 2010-11. In this case, Rs. 10/- shares has been issued at a premium of Rs. 990-. On this question, the assessee has not even attempted to justify the amount of share premium. A perusal of the audited stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. The Ld. A.R also stated that Section 56(2)(viib) of the Act which provides for addition of income if the shares are issued at a price which is higher than fair market value of the shares but the same is effective from AY 2013-14 and not the year under consideration which has been settled by various judicial forums. The Ld. A.R also referred to the worth of the share subscribers which was approx. forty to fifty times of the amount invested in the assessee company by way of equity shares. The ld AR , therefore, submitted that the subscribers were having sufficient net worth and the identity, creditworthiness of the investors and genuineness of the transactions cannot be doubted. The Ld. A.R, while referring to PB serial no. 8 to 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds or net worth would not automatically proved that they have creditworthiness to invest the money and transactions are genuine. The Ld. D.R therefore prayed in view of reasoning by authorities below, the appeal of the assessee may be dismissed. 8. We have heard rival contentions and perused the material on record, we find that during the year the assessee has raised money from five subscribers by issuing equity shares of face value of 10/- each and at a premium of Rs. 990/-. The net worth or the book value as per share as per books of account of the assessee was 212/- per share whereas the assessee was issued shares at a premium of Rs. 990/-. We also note that the assessee company was incorporated in 2007 and over a period of four ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Vanijya Pvt. Ltd. U51109WB2008PTC25999 11,95,88,722 30,00,000 Total 2,80,00,000 We note from the above table the subscribers have sufficient net worth to make investments in the shares of the assessee company as the net worth of these companies are 40 to 50 times higher than the investments made in the assessee company. We find that the assessee has filed all the evidences as stated above consisting of copies of ITRs, audited accounts, certificates of incorporation, Memorandum and Articles, Annual Returns filed with ROC, bank statements, replies to summons issued u/s 131 of the Act, so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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