Share Application Money from Existing Shareholders, Later Converted to Shares, Is a Capital Receipt

Advertisement ACIT Vs Dewanchand Ramsaran Industries Pvt. Ltd. (ITAT Mumbai) The ITAT Mumbai addressed an appeal by the Revenue against the CIT(A)’s decision to delete an addition of Rs. 10,17,05,000 made by the AO under Section 28(iv) of the Income Tax Act. This addition pertained to share application money received by Dewanchand Ramsaran Industries Pvt. Ltd. from its existing shareholders. The AO had invoked Section 28(iv), arguing that the pending allotment of shares represented a benefit or perquisite for the assessee, taxable as business income, even though the genuineness of the...