GASIFPOWER TECH PRIVATE LIMITED,THANE WEST vs. INCOME TAX OFFICER, THANE WEST

Learned Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs. 1,48,09,256/- u/s. 56(2)(viib) of the Act. Gasifpower Tech Private Ltd. 2. Learned Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs. 3,06,200/-”

The assessee is a company engaged in the business of manufacturer of Machinery used in power sector. The assessee filed the return of income for AY 2015-16 on 30.09.2015 declaring a total Loss of Rs. 30,59,040/-. Subsequently, the case was selected for complete scrutiny in order to verify large share premium on issue of shares during the year. During the course of assessment proceedings the Assessing Officer (AO) noticed that the assessee has received a sum of Rs. 1,48,09,256/- as share premium on issue of shares. The AO further noticed that the assessee has shown the authorized share capital of Rs. 5,00,000/- and paid capital of Rs. 1,89,370/- . The AO issued a show cause notice as to why the provisions of section 56(2)(viib) of the Act cannot be invoked for the reason that the premium received is more than the Fair Market Value (FMV) of the shares. The assessee submitted that the funds have not come from outside source and it is the promoter director who has invested the money. The assessee further submitted that the promoter director has given loan to the assessee in earlier years and the same is converted to shares @ premium during the year. The also stated that the tax consultant has erroneously filed the forms with