Share premium received by deemed public company: section 56(2)(viib) taxability barred; addition deleted, appeal allowed

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The dominant issue was whether share premium could be taxed as income under section 56(2)(viib) when the assessee had become a deemed public company. Since the assessee became a subsidiary of a public company in which the public were substantially interested, it qualified as a deemed public company under section 2(18). As section 56(2)(viib) excludes companies in which the public are substantially interested, the statutory condition for invoking section 56(2)(viib) failed; consequently, the share premium addition lacked legal foundation and was directed to be deleted, and the appeal was allowed. - ITAT....