Case Law Details
Hiranandani Healthcare Private limited Vs CIT (ITAT Mumbai)
ITAT Mumbai held that tax authorities cannot assessee share premium amount under section 68 of the Income Tax Act. Accordingly, addition made u/s 68 is liable to be deleted.
Facts- The assessee is contesting the decision of the tax authorities in rejecting the claim for set off brought forward losses by applying provisions of section 79 of the I.T. Act. In A.Y. 20 12-13 the assessee is also contesting the addition of Rs. 27 crores made under section 68 of the Act.
Conclusion- We find merit in the contentions of the learned AR that the provisions of section 79 will not be applicable in the facts of the present case. Hence, we are not able to agree with the view expressed by the tax authorities that the change in individual shareholding of the shareholders would also attract provision of section 79 of the Act. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and direct the Assessing Officer to allow set off brought forward losses both in A.Y. 2012-13 & 2013-14.
The addition has been made only on the ground that the assessee has failed to substantiate the share premium @ Rs.90/- per share, i.e., the capacity of the assessee to charge high share premium is being questioned by the tax authorities. In our considered view, the above said question would not be covered by the provisions of sec.68 of the Act, since we have noticed earlier the provisions of sec 68 would be directed towards the creditor only. Accordingly, we are of the view that the tax authorities are not justified in assessing share premium amount u/s 68 of the Act. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition of Rs.27 crores made u/s 68 of the Act.
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