ITO Vs Savera Towers (P) Ltd. (ITAT Kolkata)
At the outset, we find that the assessee had received share capital of Rs. 54,200 from 4 corporate entities and Rs. 2,70,45,800 from the very same shareholders towards share premium. The share capital received by the assessee has been duly accepted by the learned assessing officer within the ken of section 68 of the Act. However, share premium component has been doubted by the learned assessing officer. We find that the assessee in the instant case had duly complied with by furnishing the complete details of share subscribers to prove their identity, genuineness of the transaction and creditworthiness of share subscribers beyond doubt. These are duly supported by the documentary evidences which are enclosed in the paper book. The learned assessing officer had not found any falsity or any adverse inference of the said documents. We find that the learned Commissioner (Appeals) had placed heavy reliance on these documents and had granted relief to the assessee. All the share subscribers are duly assessed to income tax and the transaction with the assessee company are duly routed through banking channels and are duly reflected in their respective audited balance sheets which are also placed on record before us. In any case, once the receipt of share capital has been accepted as genuine within the ken of section 68 of the Act, there is no reason for the learned assessing officer to doubt the share premium component received from the very same shareholders as bogus. We held that all the three necessary ingredients of section 68 had been duly complied with by the assessee with proper documentary evidences. We find that notices issued under section 133(6) have been duly complied with. The only grievance of the learned assessing officer was that the assessee could not produce the directors of the share subscribing companies. In our considered opinion, for this reason alone, there cannot be any addition under section 68 of the Act as held by the Hon’ble Supreme Court in the case ofCIT v. Orissa Corporation Pvt. Ltd. (1986) 159 ITR 78 (SC) .
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the Revenue arises out of the order of the learned Commissioner (Appeals)-4, Kolkata [in short the ld. CIT(A)] in Appeal No. Commissioner (Appeals), Kolkata-4/10381/15-16, dt. 30-9-2016 against the order passed by the ITO, Ward-10(4), Kolkata [in short the ld. AO] under section 143(3) of the Income Tax Act, 1961 (in short “the Act”) dated 12-3-2015 for the assessment year 2012-13.
2. The only effective issue to be decided in this appeal is as to whether the learned Commissioner (Appeals) was justified in deleting the addition made towards share premium in the sum of Rs. 2,70,45,800, in the facts and circumstances of the case.
3. The brief facts of this issue is that the assessee company raised share capital and share premium during the year under appeal. The learned assessing officer observed that since there was no substantial business activity carried on by the assessee, the assessee company cannot command huge share premium. Accordingly he sought to verify the veracity of the share capital and share premium raised by the assessee. The assessee submitted that it is engaged in the business of investment in shares of limited companies. The assessee raised share capital and share premium from 4 corporate entities as under :–
