PCIT Vs Minto Park Estates Private Limited (Calcutta High Court)
Calcutta High Court held that addition towards share capital/ premium as unexplained cash credit u/s. 68 of the Income Tax Act justified since the assessee did not discharge the creditworthiness and the genuineness of the transactions. Accordingly, appeal of revenue allowed.
Facts- The case of the assessee was selected for scrutiny. AO noted that 24000 shares were allotted with premium of Rs. 1,17,60,000/- at the rate of Rs. 419 per share to 9 subscribers. AO examined the financial stability of the share subscriber companies and noted that all of them reported the source of investment from sale of shares. Further AO noted that all the seven investing companies reported NIL income from its operations. AO came to the conclusion that the identity, creditworthiness of the subscriber companies and the genuineness of the transaction has not been established and the sum of Rs. 1,10,00,000/- received from 8 subscribers out of 9 subscriber companies in the books of the assessee companies is cash credit u/s. 68 of the Act and accordingly added the amount.
CIT(A) dismissed the appeal. Tribunal allowed the appeal and deleted the addition. Accordingly, being aggrieved, revenue has preferred the present appeal.
