Nathan Anil Rao Vs ITO (ITAT Mumbai)
The appeal before the Income Tax Appellate Tribunal (ITAT), Mumbai Bench, arose from an order of the Commissioner of Income Tax (Appeals) dated 22.10.2025 for Assessment Year 2017–18. The assessee challenged the assessment wherein total income was determined at ₹16,07,69,040 as against the returned income of ₹4,01,94,310, primarily due to an addition of ₹16,02,68,952 under Sections 68/69 of the Income Tax Act on account of alleged unexplained share premium.
The assessee contended that the CIT(A) passed an ex-parte order without granting a proper opportunity of being heard, despite requests for adjournment. It was submitted that the adjournment was sought due to the need to collate documents, including those relating to a non-resident buyer, which required coordination and time. The assessee also filed an application for admission of additional evidence before the Tribunal.
The CIT(A), while dismissing the appeal, held that the assessee failed to discharge the onus under Section 68 to establish the identity, creditworthiness, and genuineness of the transaction relating to share premium. The assessing officer had relied on a valuation report which determined the fair value of shares significantly lower than the transaction value. The assessee had sold 5048 shares of a company to a non-resident entity for a total consideration of approximately ₹20 crore. However, the premium charged was considered excessive and unexplained, leading to the addition under Section 68.
