Section 68 addition Not Applicable to Shares Issued for Goodwill: Delhi HC

PCIT 7 Vs Zexus Air Services Pvt. Ltd. (Delhi High Court) The Delhi High Court dismissed an appeal by the Principal Commissioner of Income Tax (PCIT) against the Income Tax Appellate Tribunal (ITAT) ruling in favor of Zexus Air Services Pvt. Ltd. The case centered on whether the issuance of shares in exchange for goodwill, without monetary consideration, should be taxed under Section 68 of the Income Tax Act, 1961. The court upheld ITAT’s decision, stating that Section 68 applies only to unexplained cash credits and not to book entries made for legitimate business transactions. The dispute a...