2026 (4) TMI 1622

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....f the Income Tax Act, 1961 (hereinafter referred to as the 'the Act') by the ITO, Ward 4(5), Gurugram, (hereinafter referred to as the 'AO') pertaining to Assessment Year 2016-17. 2. Brief facts of the case: Return declaring Income of NIL and Rs. 105,440/- as deemed income under section 115JB was e-filed by the assessee on 15.10.2016 and the same was processed w/s 143(1). The case was selected for limited scrutiny under CASS "to verify the large share premium received during the year and applicability of section 56(2)(viib)" as noted by the AO in the assessment order. Notice u/s 143(2) of the Income Tax Act, 1961 was issued to the assessee company electronically on 27.7.2017. The AO noted that on 06.10.2017, the assessee replied the noti....

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.... share premium remained not only unsatisfactory but also valued at high premium without any cogent basis. Therefore, the whole of the contended share capital (including share premium) of Rs. 3,47,47,166/- is treated as bogus transaction and treated as unexplained credit u/s 68 of the income-tax act, 1961 and added to the income of the assessee company. (Addition Rs. 3,47,47,166/-) .................xxx..................... On the point of dealing with the share premium in terms of section 56(2)(viib) of the Act, it is noted that the question of dealing with and testing the fair market value of the shares under the Rule 11UA would arise only and only where there is no doubt about the identity, creditworthiness, genuineness and rea....

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.... Ld. AO erred in making an addition of Rs 3,47,47,166/-u/s 68 solely on suspicion, surmises and without making any inquiry whatsoever 5. That in the facts and circumstances of the case, the Ld. AO erred in not considering that Rs. 1,74,99,304/- were not amounts credited in the previous year under consideration but were amounts adjusted against the old loans, proving that the additions have been made without any application of mind 6. That in the facts and circumstances of the case, the Ld. AO erred in making an addition u/s 68, more so when it were the promoters themselves who infused funds into the company for business purposes. Hence, the identity, genuineness and creditworthiness were duly justified. 7. That in....

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....he order of the Coordinate Bench of Tribunal in the case of M/s Krian Cinema Banquets Pvt. Ltd. vs. The ACIT 10(1)(2) in ITA No.- 4860/Mum/2025 and submitted that in similar circumstances, the Tribunal had held the assessment order as invalid order and had quashed the same. Accordingly, the Ld. AR submitted that the assessment framed by the AO in the case of the assessee was bad in law and should be quashed. 6. On the other hand, the Ld. DR supported the orders of the authorities below. 7. We have heard both the parties and perused the material available on record. On perusal of the assessment order, it is seen that the case was selected for limited scrutiny under CASS to verify the large share premium received during the year and app....