TaxTMI 
TaxTMI 
2019 (4) TMI 556
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....d that assessee allegedly received Rs. 73,50,000/- share application money/premium on substantially higher value without any justification. A copy of notice u/s 148 is available on paper book page no. 1. The assessee furnished the return of income electronically on 27.04.2016 and also furnished a hard copy on 29.04.2016. The Assessing Officer has completed the assessment u/s 148/144 of the Income Tax Act, 1961 16.12.2016 determining total income at Rs. 73,50,000/- by making addition of the alleged shares premium u/s 68 of the Act and treating the share premium of Rs. 73,50,000/- as income of the assessee. 5. By the impugned order, the ld CIT(A) has deleted the addition after observing as under: "3.3.2 Determination: (i) I have duly considered the submissions of the appellant, assessment order, remand report of the AO, rejoinder of the appellant to the remand report of the AO and the material placed on record. It is noted that during the year under consideration the appellant has issued 15000 equity shares of face value of Rs. 10/- each at a premium of Rs. 490/- each i.e. 15000 equity shares were issued for a total consideration of Rs. 75 lakh including share ca....
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....ase under consideration, which reads as under:- "56. Income from other sources. (I) "Income of every kind which is not to be excluded from the total income under the Act shall be chargeable to income tax under the head. "Income from other sources", if it is not chargeable to income tax under any of the heads specified in section 14, items A to E." (iv) The provisions of Section 56(1) the Act can be invoked to tax income of every kind which is not chargeable to tax under any head specified in section 14, under the head 'Income from other sources'. Therefore, provisions of sec 56(1) are not applicable. Further the amended provisions of sec 56 (2) of the Act specify the various income to be assessed under this section. The premium on shares has been included u/s sec 56(2) (viiib) of the Act w.e.f. 01.04.2014, which is reproduced as under: "56(2) In particular, and without prejudice to the generality of the provisions of sub-section ( I ) , the following incomes, shall be chargeable to income tax under the head "Income from other sources" namely:- (i) dividends (ia) to (viia)... (viib) Where a company, not being a compa....
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....the definition of "income" under subclause (xvi) of clause (24) of section 2. (ii) Considering that the proposed amendment may cause avoidable difficulty to investors who invest in start-ups where the fair market value may not be determined accurately, it is proposed to provide an exemption to any other class of investors as may be notified by the Central Government. These amendments will take effect from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013-14 and subsequent assessment years." (vii) The provisions of sec 56(2) (viib) of Income-tax Act, 1961 are applicable w.e.f. 1st April, 2013 and will accordingly apply in relation to AY 2013-14 and subsequent assessment years. The income as mentioned in section 56(2) (viib) of the Act is included in definition of section 2(24) of the Act w.e.f. 01-04-2013. Therefore, the provisions of these sections cannot be made applicable prior to A.Y. 2013-14. (viii) Reliance is placed on the judgement dated 30.10.2017 of Hon'ble ITAT, Jaipur in the case of M/s. Motisons Buildtech Pvt. Ltd. Vs ACIT in ITA No. 481 /JP/2017 for AY 2009-10, wherein the appeal of the revenue on t....
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....of more than 5 months were allowed to it. It is pertinent to mention here that in its remand report, the AO could not controvert the above submissions of the appellant but only stated that: "In compliance to the letter u/s 133(6) the assessee has furnished written reply on 12.06.2014 (copy enclosed). In the reply the assessee itself accepted that the share premium was received during the A.Y. 2009-10 and no details has furnished during assessment proceedings. Hence the allegation of the assessee is incorrect." (xi) It may be mentioned that the above reply of the appellant, as relied upon by the AO, could be used for initiating proceedings u/s 147 of the Act but not for making addition u/s 68 of the Act as the same is not supported with any corroborative evidence. The AO must ascertain the year in which the such sum was received by the appellant and the AO should have made necessary verification in this regard. For making addition u/s 68 of the Act, the sum must have been credited in the books of accounts of the appellant, during the year under consideration and there is no evidence on record, which may establish that the share capital as well as share premium was ....
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.... in making the impugned addition under section 68 and as such no fault could be found with the order of the Tribunal which had endorsed the decision of Commissioner (Appeals). In Mahabir Prasad Prem Chand Jain v. ITO [1988] 40 Taxman 35 (Mag.)(Delhi), it was held that amounts found in the books of assessee were in existence much prior to the beginning of the accounting period corresponding to the relevant assessment year and the same could not, therefore, be treated as the income of assessee earned during the relevant previous year. In Nuchem Ltd. v. Dy. CIT [2004] 87 TTJ 166 (Delhi - Trib.), it was held that revenue had failed to prove that the amounts were credited to the books of account of the assessee in the year under consideration. These amounts were brought forward from earlier years and it is settled law that the addition under section 68 could be made only if the amount was credited in the accounts of the assessee in the relevant financial year. In Shri Vardhman Overseas Ltd.'s case (supra), it was held that no new amount had been credited by assessee in its account during the year under consideration. Therefore, applicability of section 68 is also ruled out ....
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....nces of the case and in law the Ld. CIT (Appeals)-I. Jaipur has erred in:- "1. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was justified in deleting the addition of Rs. 73,50,000/- made by the AO on account unexplained credit of share premium? 2. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was not justified in ignoring the fact that the assessee has declared share application money receipt in balance sheet for F.Y. 2008- 09 relevant to A.Y. 2009-10? 3. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was not justified to appreciate the facts that the assessee has credited the share application money during A.Y. 2009-10 ( in balance sheet)? 4. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was not justified in ignoring the facts that the assessee has not filed bank statement and confirmations of share application money/share premium received during assessment proceeding?" 7. It was argued by the ld DR that the assessee has not satisfactorily explained the genuineness and creditworthiness of the ....