2026 (1) TMI 1279

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....ed substantial error in law in holding that the assessee which is a Pot. Ltd. company, having negligible income was justified in raising huge share capital, with a premium as high 99 times? ii) Whether the Learned Income Tax Appellate Tribunal has committed substantial error in law in holding that the share applicant/subscriber companies were genuine companies though none of the directors or representatives appeared on summons under section 131 but all of them posted all documents via post on the same day i.e. 14.03.2015 by same post office (Kolkata GPO) and the same time between 17:54 to 17.55?" This Court perused the memorandum of appeal, application for stay and the impugned judgment of the Tribunal dated 29.2.2024. ....

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....scribers at face value of Rs. 10/- each at a premium of Rs. 990/- per share though the book value of the share was Rs. 212/- per share. However as per the growth of the company the value of the share has increased 20 times over a period of four years: The Ld. A.R submitted that the assessee was incorporated in 2007 and during the period of 4 years the worth of shares has gone up 20 times. It is only on this basis, the issue price of the shares has been fixed by the assessee. The Ld. A.R also stated that Section 56(2)(viib) of the Act which provides for addition of income if the shiures 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 h....

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....stated above. Therefore the addition as confirmed by the Ld. CIT(A) may kindly be deleted. 7. The Ld. D.R on the other hand relied on the order of authorities below and submitted that the AO as well as Ld. CIT(A) has passed a very speaking and reasoned order stating as to how the money received by the assessee from five subscribers do not satisfy the basic three conditions as provided in Section 68 of the Act. The mere fact that subscribers have sufficient 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....