Case Law Details
ITO Vs LNB Renewable Energy Pvt. Ltd (ITAT Kolkata)
ITAT Kolkata held that company incorporated on 07.11.2012 and valuation of share done on 16.11.2012, therefore share premium on issue of equity share capital and issue of preference share capital are hit by provisions of section 56(2)(viib) of the Income Tax Act and hence addition towards share premium sustained.
Facts-
The case of the assessee was selected for scrutiny through CASS followed by serving of notices u/s 143(2) & 142(1) of the Act. During the course of assessment proceedings, AO after going through the financial statements and other details filed by the assessee observed that during the year share premium of Rs. 5 lakh was received @ Rs. 2.5/- per share on the issue of equity share equal and share premium of Rs. 8 Crore received @ Rs. 25/- per share on the issue of preference shares capital. AO observed that the assessee company incorporated during FY 2012-13 has charged share premium on issue of equity share capital and preference share capital.
On 28.03.2016 the case was referred to the District Valuation Officer, but on 30.03.2016 reply was received from the Asst. Valuation Officer-6, Kolkata stating that the Valuation Officer deals only with immovable property and has not dealt with the valuation of shares, debenture, jewellery, vehicle, machinery and plant. On the same day, AO completed the assessment making addition of Rs. 8.05 Cr for the alleged share premium received in excess of the face value of the shares invoking the provisions of Section 56(2)(viib) of the Act.
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