Case Law Details
DCIT Vs Alishan Steels Pvt (ITAT Kolkata)
Conclusion: Section 68 had no application when the shares were allotted by the assessee-company under a barter system as the respective parties did not receive cash nor did pay any cash, there was no real credit of cash in the cash book and the question of inclusion of the amount of the entry as unexplained cash credit could not arise.
Held: Assessee-company was engaged in the business of manufacturing of MS Ingots. The return of income for the year under consideration was filed by it declaring a loss of 92,81,581/-. During the course of assessment proceedings, the claim of the assessee of having received share capital and share premium amount aggregating to Rs.6,00,00,000/- was examined by AO. AO treated the entire share capital and share premium amount aggregating to Rs.6,00,00,000/- as unexplained cash credit and an addition to that extent was made by him under section 68 to the total income of the assessee in the assessment completed under section 143(3). It was held that following the decision in the case of ITO -vs.- M/s. Bhagwat Marom Pvt. Limited vide its order dated July 31, 2019 wherein it was held that when the cash did not pass at any stage and since the respective parties did not receive cash nor did pay any cash, there was no real credit of cash in the cash book and the question of inclusion of the amount of the entry as unexplained cash credit could not arise. Thus, where there was no cash or cheque payment received against the issue of share capital with premium, and the provisions of section 68 had no application.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal is preferred by the Revenue against the order of Id. Commissioner of Income Tax (Appeals)-9, Kolkata dated 11.07.2017.
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