Case Law Details
Sagitarius Securities Pvt Ltd Vs ITO (ITAT Delhi)
ITAT Delhi held that addition of difference between the share valued by the company and value determined as per IT Rules sustained as the assessee failed to discharge his onus of proof.
Facts- The appellant company was incorporated in the year 1995 and since then, till date, is not doing any business but is only engaged in providing accommodation entries. The more peculiar fact is that during the year, in spite of zero business activities, the assessee company issued 8 lakhs shares, each of face value of Rs. 10/- to two companies, namely, M/s Elecon Securities Pvt Ltd and M/s Ordinary Financial Services Pvt Ltd.
This transaction becomes more scarier when we find that this issue of 8 lakhs shares was in consideration of 60,000 shares received by the assessee from the two companies to whom shares were allotted. These two companies have allotted 60,000 shares for Rs. 6 crores with a staggering Rs. 1,000/- per share.
Since the assessee has received shares of value Rs. 6 crores each from M/s Elecon Securities Pvt Ltd and M/s Ordinary Financial Services Pvt Ltd., it valued its own shares at Rs. 75/- each, which comprises of face value of Rs. 10/- and premium of Rs. 65/-. This entire transaction is something called “res ipsa loquitor” – Facts speaking their own story.
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