Securities premium is not accumulated profits u/s 2(22)(e): ITAT

Brief of the Case ITAT Bangalore held in the case M/s Jeans Knit Pvt. Ltd. vs. ACIT that it is clear that the balance in the reserve and surplus is only on account of security premium amount after reducing the loss incurred by the assessee for the earlier year as well as during the year under consideration. Therefore, there is no dispute about the fact that the reserve and surplus amount does not show any accumulated profit but the amount shown is only loss as well as premium on securities. Explanation 1 and 2 to sec.2 (22) (e) do not propose to include the premium on securities/shares in the ...