Bonafide business transaction cannot be taxed U/s. 56(2)(vii)

ACIT Vs Shri Subhodh Menon (ITAT Mumbai) Conclusion: Difference between alleged fair market value of share and the subscribed value of shares cannot be assessed as income u/s 56(2)(vii)(c) as the transaction of issue of shares was carried out to comply with a covenant in the loan agreement with the bank to fund the acquisition of the business by the subsidiary in USA, therefore, such a bonafide business transaction could not be taxed under section 56(2)(vii) especially when there was not even a whisper about money laundering by the AO in the assessment order. Held: Assessee held 34.57% of th...