Case Law Details
ITO Vs Happy Structure Pvt. Ltd. (ITAT Kolkata)
The case of ITO vs. Happy Structure Pvt. Ltd. before the Income Tax Appellate Tribunal (ITAT) Kolkata has significant implications for tax law in India. This case revolves around the contentious issue of whether the share application amount can be added twice, both in the hands of the payees and the recipients under Section 68 of the Income Tax Act, 1961. The tribunal’s decision provides clarity on the interpretation of Section 68 concerning the assessment of share application money, which is crucial for companies and tax authorities alike.
Background of the Case
The appeal by the revenue was directed against the order of the Commissioner of Income Tax (Appeals)-4, Kolkata, for the Assessment Year 2012-13. The primary contention was that the assessee, Happy Structure Pvt. Ltd., had received share application money from corporate entities that were independently assessed to tax. The payments were received through account payee cheques, and the investments were confirmed by the subscribers. However, the Assessing Officer (AO) had added this share application money to the income of the assessee under Section 68, citing lack of proof of the genuineness of transactions and the creditworthiness of the investors.
Revenue’s Arguments
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