Section 56(2)(viib) Applies to Share Premium Exceeding FMV, Regardless of Shareholder Relationship or Status

Canpac Trends Pvt. Ltd. Vs ACIT (ITAT Ahmedabad)

The Income Tax Appellate Tribunal (ITAT) in Ahmedabad addressed an appeal filed by Canpac Trends Pvt. Ltd. against an order by the Commissioner of Income Tax (Appeals) (CIT(A)). The initial assessment by the Assistant Commissioner of Income Tax (AO) resulted in additions to the company’s income for the assessment year 2017-18. The AO had identified two primary issues: disallowance under Section 36(1)(va) for delayed employee contributions to PF/ESI, and an addition under Section 56(2)(viib) related to excessive share premiums. The

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