Political contribution deductions require assessee-specific proof before cash-back allegations can justify disallowance or unexplained-money additions...
ITAT upheld the CIT(A)'s deletion of two additions made by the AO. First, interest earned from deposits was correctly held to be inextricably linked with setting up the plant, following Bokaro Steels Limited (1998), and thus not taxable as "Income from other sources." Second, the Tribunal confirmed deletion of share premium disallowance under s. 56(2)(viib), as the shares were issued to an existing shareholder whose identity and creditworthiness were established. The valuation of Rs. 12 per share was properly determined using the DCF method prescribed by RBI, and the AO had not disputed this valuation methodology. Appeal decided against Revenue.
ITAT upheld the CIT(A)'s deletion of two additions made by the AO. First, interest earned from deposits was correctly held to be inextricably linked with setting up the plant, following Bokaro Steels Limited (1998), and thus not taxable as "Income from other sources." Second, the Tribunal confirmed deletion of share premium disallowance under s. 56(2)(viib), as the shares were issued to an existing shareholder whose identity and creditworthiness were established. The valuation of Rs. 12 per share was properly determined using the DCF method prescribed by RBI, and the AO had not disputed this valuation methodology. Appeal decided against Revenue.
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