Case Law Details
Valley Iron & Steel Co. Ltd. Vs PCIT (Delhi High Court)
Delhi High Court held that benefit of deduction under section 80IC of the Income Tax Act available even in case of addition of unsubstantiated share capital into the account of the assessee under Section 68 of the Act.
Facts- The petitioner-assessee impugns the order dated 28 February 2017 passed by the Income Tax Settlement Commission with the challenge being restricted to the additions made with respect to the infusion of share capital by M/s Amit Goods and Supplier Private Ltd. and the denial of benefit of deductions u/s. 80IC of the Income Tax Act, 1961 on the income of INR 24.99 crores. The Principal Commissioner of Income Tax has also assailed the aforesaid order of the ITSC and to the extent that relief was accorded to the assessee, including grant of immunity from prosecution.
The present writ petitions constitute the second round of litigation since the application for settlement had initially come to be disposed of by the ITSC in terms of an order dated 31 July 2013. The aforesaid order was assailed before this Court by way of W.P.(C) 929/2015 which came to be allowed by way of an order dated 06 May 2016, whereby the Court quashed and set aside the order passed by the ITSC and required it to examine the issues emanating from the infusion of unexplained share capital and deductions liable to be accorded in terms of Section 80IC of the Act.
Conclusion- Held that we allow WP(C) 5081/2017 and set aside the order of the ITSC in part and insofar as it relates to additions made with respect to infusion of share capital by M/s Amit Goods and Supplier Private Limited to the tune of INR 11,26,60,000. We also set aside the ITSC’s order, which held that addition of unsubstantiated share capital into the account of the assessee under Section 68 of the Act would not qualify for the benefits of deduction under Section 80IC of the Act. The petitioner-assessee shall be entitled to consequential reliefs.
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