TaxTMI 
TaxTMI 
2020 (9) TMI 916
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..... Rival contentions have been heard and record perused. The brief facts of the case are that the assessee who is a Share Holder in M/s Pinkcity Jewelhouse Pvt. Ltd. having more than 10% voting power had applied for allotment of shares of the Company Pinkcity jewel House Pvt Ltd. The assessee accepted the offer and applied for allotment of 11,20,000 shares and paid the value of shares amounting to Rs. 1,12,00,000/- through various cheques. The cheque was handed over to the company along with share applications. The assessee was also having a running account in the company in which he had a credit balance. The Company allotted the shares without presenting the cheque for clearance before allotment and made credit entry for these cheques in her ledger account as well as debited the value of shares to her running account and therefore her account never represented a debit balance. However, two Cheque of Rs. 35,00,000/- each which were credited in the books on 01.02.2013 & 2.2.2013 but the cheques was presented by the company after some time but during the current financial year, in the books of the assessee there was a credit balance of Rs. 20,00,000/- on 4.2.2013 even after debit of R....
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....tality of the facts, the addition made by the AO on account of deemed dividend u/s 2(22)(e) of the Act is deleted. 7. We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that the fact is that the assessee had made payment of value of shares along with the application for allotment of 1120000 shares thus she was not in default of making payment for value of shares applied for on her part. The Company M/s Pinkcity Jewelhouse Pvt. Ltd. did not present the cheque for claim before making the allotment and on allotment of shares on 4.2.13 debited the value of shares to the ledger account of the assessee, thus in fact there was no debit balance as on 4.02.2013. But the learned assessing officer due to the fact the cheque were cleared later on treated Rs. 50 Lacs as deemed dividend. 8. Provisions of Section 2(22)(e) of the Act comes to play only if the company makes any payment to such shareholder, by way of advance or loan and that too to the extent the company possesses accumulated profit, provided that his/her holding is not less than ten percent of voting power. From provisions of section 2(22)(e) it is....
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.... the learned ACIT determined the fair market value of the share at Rs. 20.37 per share and made an addition of Rs. 1,16,14,400/- being the difference calculated between fair market value and that of face value under section 56(2)(vii)(c) of the Act. 13. By the impugned order, the ld. CIT(A) had deleted the addition after observing as under: "3.2.2 Determination: (i) As discussed during the year, the appellant was allotted 11,20,000 additional shares by M/s Pinkcity Jewel House Pvt. Ltd. The above shares were allotted at Rs. 10/- of face value only. The AO noted that the FMV of such shares at the time of allotment, as per the books of accounts of the company was Rs. 20.37. As the share's were allotted at Rs. 10/- only, the AO treated the difference of Rs. 10.37 as benefit transferred to the appellant. Considering the provision of section 56(2)(vii)(c) of the Act, the AO taxed Rs. 1,16,14,400/- (11,20,000 * 10.37) as deemed income of the appellant. The relevant portion of the assessment order is reproduced as under: "8. ADDITION ON A/C SHARE ALLOTMENT U/S 56(2)(Vii)(C Further, as mentioned above in the reasons recorded for re-opening of the ....
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....holder in the company. It was submitted that the appellant's share in company before allotment of additional shares was 35% which also remained at 35% even after allotment of additional shares. The appellant relied on the judgment of Hon'ble ITAT in the case of M/s Sudhir Menon HUF vs. AC IT (2014) 103 DTR 0145 (Mum ITAT) wherein it was held that as long as there no disproportional allotment of shares, there is no scope for any property being received by the taxpayer and addition u/s 56(2)(vii)(c) of the Act cannot be made. The appellant also filed the working to show that after allotment of additional shares. the average value per share has also reduced and after taking into account the payment made by the appellant: no gain has arisen in hands of the appellant. (iii) I have duly considered the submissions of the appellant, assessment order and the material placed on record. The shareholding pattern of the M/s Pinkcity Jewel House Pvt. Ltd before and after the allotment of additional shares, as submitted by the appellant, is as under: "Memberwise Share Holding Pattern and Analysis S.No. Category Name No of Shares As on 31.3.2012 % of Share ....
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....ut consideration, FMV of which was in excess of Rs. 50,000, or where difference between FMV and such consideration exceeds amount . specified-Issue of additional/bonus shares was capitalization of profit by issuing-company-There was neither any increase nor decrease in wealth of shareholder or of issuing company on account of bonus issue-As long as there was no disproportionate allotment, there was no scope for any property being received by shareholders on allotment of bonus shares-Section 56(2)(vii)(c) would apply uniformly for all capital assets, drawing no exception for any particular class or category of specified Assets, as 'right' shares-No addition u/s. 56(2)(vii)(c) would arise-Language employed in statue would be determinative factor of legislative intent- Foundational basis of any interpretation, would be found from words used by Legislature itself-Consequences would not alter meaning of statutory provision where such meaning is plain and unambiguous-'Income' being word of widest 'amplitude, would include gains derived in any manner=Provision of section 56(2)(vii)(c) would not apply and specified amount could not be assessed as income in hands of asse....
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.... is justified in the hands of the appellant. The addition made by the AO amounting to Rs. 1,16,14,400/- is deleted." 14. Against the above order of the ld. CIT(A), the revenue is in appeal before the ITAT. 15. We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that as per the provisions of the section 56(2)(vii)(c)(i), any property other than immovable property is transferred for a consideration which is less than the aggregate fair market value of the property by an amount exceeding Rs. 50000/-, the aggregate fair market value of such property as exceeds such consideration will be treated as income of the assessee. Following the above provisions of the Act, the learned ACIT has made an addition of Rs. 1,16,14.400/- treating the difference exceeding the consideration paid for shares as income of the assessee. This issue was subject matter of dispute in the case of Sudhir Mennon HUF vs. ACIT (TS146 ITAT 2014) (Mum.) before ITAT Mumbai Bench. The facts of the case of Sudhir Mennon was that he held 15000 shares of Dorf Catal Chemicals Pvt. Ltd. During 2009-10, the company M/s Dorf Catal Chemicals P....
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....f shares and the subscribed value of shares was not sustainable. It is only when a higher than propionate allotment of fresh shares issued by a company is received by a shareholder, the provisions of section 56(2)(vii) get attracted. 16. Detailed finding so recorded by the ld. CIT(A) while deleting the addition made U/s 56(2)(vii)(c) of the Act of Rs. 1,61,14,400/- are as per material on record which do not require any interference on our part. Accordingly, we uphold the finding of the ld. CIT(A) qua this issue. 17. In the result, this appeal of the revenue is dismissed. 18. Now we take ITA No. 76/JP/2020. In this appeal, the grounds taken by the revenue are exactly same as ITA No. 75/JP/2020. Facts and submissions are also identical to the facts and submissions made in ITA No. 75/JP/2020, therefore, following the reasoning given in ITA No. 75/JP/2020 hereinabove in case of Smt. Veena Goyal, we do not find any infirmity in the order of the ld. CIT(A) and we uphold the same. This appeal of the revenue is dismissed. 19. In the result, both these appeals of the revenue are dismissed. Order pronounced in the open court on 15th September, 2020. ============= Doc....
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....ate में अंतर के कारण लिया है। अतः ये Deemed Dividend में नही आता है। पà¥à¤°à¤·à¥à¤¨ 34 कमà¥à¤ªà¤¨à¥€ Bank Account à¤à¤µà¤‚ Directors के Company के Account में Ledger को देखने से यह बात सà¥à¤ªà¤·à¥à¤Ÿ हो जाती है कि यह पैसा तो Shares Allotted के à¤à¤• महीने से जà¥à¤¯à¤¾à¤¦à¤¾ Time गà¥à¤œà¤° जाने के बाद Company के Bank Account में Credit हà¥à¤† है फिर आप किस आधार पर कह रहे है कि C....