Case Law Details
Zhilmil Electronics Pvt. Ltd. Vs ITO (ITAT Delhi)
ITAT Delhi held that once the expenditure is allowable as business expenditure u/s 30 to 38 of the Income Tax Act there is no requirement of generation of income for claiming business expenditure.
Facts-
During the assessment proceedings, it is found that the assessee company has issued 2,35,000 equity shares to four different entities for Rs. 94,00,000/- including share premium of Rs. 70,50,000/-. The assessee has allotted equity shares at Rs. 10 per share at a premium of Rs. 30/- per share totaling to a value of Rs. 40 per share.
AO was of the opinion that the submissions made by the assessee are not acceptable in regard with the identity, creditworthiness and genuineness, therefore held that the investors are bogus and not genuine and their creditworthiness and identity are also fake beyond doubt. Accordingly, share capital and share premium amount collected/received by the assessee from the four parties amounting to Rs. 94,00,000/- are not genuine and the same has been treated as unexplained source of income of the assessee and brought to tax u/s. 68 of the Income Tax Act.
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