ACIT Vs Double Plus Software Pvt. Ltd. (ITAT Delhi)
Share Premium Row- Evidence Beats Suspicion: ITAT Delhi Drops Massive ₹190 Cr Bogus Share Capital Addition
The matter concerned a colossal addition of ₹190 crores made by AO u/s 68, in respect of share capital & premium received by Assessee during AY 2010-11.
Assessee had issued 19 lakh shares at ₹990 premium each, aggregating ₹190 crores. AO alleged that funds were routed through three group companies- Blessings Commercial Pvt. Ltd., Stephens Financial Services Pvt. Ltd., & Sayaji Marketing Pvt. Ltd.-using “& Co.” crossed cheques & were repeatedly circulated before returning to Assessee. Holding the entire arrangement as sham, AO brought the amount to tax u/s 68. CIT(A), however, deleted the addition, noting that the very same sum had already been added in the hands of the investor companies.
In the first round of litigation, ITAT had upheld the addition ex-parte in 2018, but this was set aside by the Delhi High Court in November 2023 with a remand for fresh adjudication.
Before the Tribunal, Assessee contended that (i) the transactions were valid endorsements under the Companies Act & Negotiable Instruments Act, (ii) no “cash credit” in the ordinary sense arose, & (iii) taxing the same ₹190 crores both in its hands & in the investors’ hands amounted to double taxation, impermissible under settled law. Revenue, on the other hand, pressed reliance on Kolkata ITAT rulings against the investors & argued that Assessee had not discharged its onus of proving genuineness & creditworthiness.
