ACIT Vs Semall Impex Private Limited (ITAT Kolkata)
We find that undisputedly the assessee company has issued shares of Rs. 4,00,000/- of face value of Rs. 10/- each at a premium of Rs. 100/- to the holding company Deltmal Safety Shoes Pvt. Ltd. We also note that the assessee used to make purchases from the holding company and the assessee owed huge money to the holding company for the said supplies. This is also undisputed that there was no money transactionsbetween the assessee and holding company and the shares were issued amounting to Rs. 4,40,00,000/- out of money owed by the assessee company to the holding company. In our opinion, the doubt of the AO about the genuineness and creditworthiness is misplaced. We also note that the Ld. CIT(A) has deleted the addition on the ground that no money has come into the books of account of the assesse during the year and therefore the provisions of section 68 of the Act are not applicable. The case of the assessee finds support from the decision of Hon’ble Madras High Court in the case of M/s V.R. Global Energy Pvt. Ltd. vs. ITO in 407 ITR 145 (Mad) wherein it has been held that if no cash is involved , section 68 of the Act treating as the share capital/share premium as unexplained cash credit is wrong as the transaction of allotment of shares by way of book adjustment and provisions of section 68 of the Act are not attracted. We also note that subsequent SLP was also dismissed by the Hon’ble Apex Court in ITO vs. V. R. Global Energy Pvt. Ltd. (2020) 268 Taxman 392 (SC). Accordingly following the above decision we are inclined to uphold the order of Ld. CIT(A) on this issue.
