PCIT Vs Saileela Synthetics Pvt. Ltd. (Rajasthan High Court)
The Rajasthan High Court dismissed the Revenue’s appeal under Section 260A of the Income-tax Act, 1961, challenging the order dated 21.12.2020 passed by the Income Tax Appellate Tribunal, Jodhpur Bench. The dispute principally concerned the deletion of an addition made under Section 68 in respect of share application money received by Saileela Synthetics Pvt. Ltd.
The assessee, engaged in manufacturing and trading synthetic fabric, filed its e-return on 28.09.2015 declaring total income of Rs.1,14,56,120/-. The case was selected for scrutiny through CASS. A notice under Section 143(2) was issued on 27.07.2016, followed by a notice under Section 142(1).
During Assessment Year 2015-16, the assessee raised share capital through allotment of equity shares. It first issued 1,81,816 equity shares and subsequently issued 3,40,665 equity shares, aggregating to 5,22,481 shares. Each share had a face value of Rs.10/- with share premium of Rs.45/- and Rs.50/-, and the shares were issued to 11 companies. The assessee accordingly received Rs.3,04,39,780/- on allotment of the shares.
According to the Revenue, the details furnished concerning the 11 companies were not proper. The Assessing Officer consequently passed the assessment order dated 29.12.2017 under Section 143(3), assessing total income at Rs.4,20,76,100/-. The assessment included the share capital addition of Rs.3,04,39,780/- under Section 68, a lump-sum addition of Rs.1,50,000/-, employees’ contribution towards ESI of Rs.5,540/-, and an addition of Rs.25,00,000/- relating to an unsecured loan together with interest of Rs.24,658/-. Penalty proceedings under Section 271(1)(c) were also initiated.
