MI Industries (India) Pvt. Ltd. Vs DCIT (ITAT Delhi)
The assessee appealed against the order of the CIT(A) dated 04.09.2025 affirming the assessment order passed under Section 143(3) for AY 2014-15, challenging, among other issues, an addition of Rs.15,05,58,000 under Section 56(2)(viib) of the Income-tax Act. The assessee had issued and allotted 21,82,000 equity shares on 26.03.2012 at a face value of Rs.10 per share with a premium of Rs.100 per share to its promoters. During the relevant assessment year, it received Rs.1,30,92,000 towards share capital and Rs.15,05,58,000 towards share premium through subsequent calls. The Assessing Officer treated the share premium received during the year as income under Section 56(2)(viib), and the CIT(A) upheld the addition.
The assessee contended that the shares had been allotted in FY 2011-12 before Section 56(2)(viib) and Rule 11UA came into force, that only call money was received during the relevant year, that the share allotment had been accepted in earlier assessments, and that the fair market value (FMV) determined under the Discounted Cash Flow (DCF) method was Rs.400.89 per share while the shares were issued at a premium of only Rs.100 per share. It also submitted that the company was in the process of setting up a textile processing unit and had substantial capital work in progress.
