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Facts
The assessee's share capital/premium of ₹1,43,00,000/- was treated as unexplained cash credit under Section 68 by the AO. The assessee contended that ₹1,33,00,000/- was received in preceding assessment years, and for the remaining ₹10,00,000/-, all evidence was furnished. The Ld. CIT(A) confirmed the addition.
Held
The Tribunal held that Section 68 could not be invoked for amounts received in preceding assessment years (₹1,33,00,000/-) based on jurisdictional High Court precedents. For the remaining ₹10,00,000/-, the assessee had provided sufficient evidence, and an addition merely for non-compliance with summons under Section 131 was unsustainable. The Tribunal directed the AO to delete the addition.
Key Issues
Whether additions made under Section 68 for unexplained share capital/premium were justified, particularly concerning amounts received in prior assessment years and the sufficiency of evidence for current year receipts.
Sections Cited
68, 133(6), 131, 143(3)
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Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 09.02.2024 for the AY 2012-13.
The only issue raised by the assessee in the grounds of appeal is against the confirmation of addition of ₹1,43,00,000/- by the ld. CIT (A) as made by the ld. AO on account of share capital/ share premium being unexplained cash credit u/s 68 of the Act by ignoring the fact that out of the said amount share capital/share premium, Rs. ₹1,33,00,000/- was received in the preceding assessment years.
Aggrieved assessee filed an appeal before the ld. CIT (A) and ld. CIT (A) dismissed the appeal after taking into consideration the contentions/submissions of the assessee. The ld. CIT (A) in Para no.4.3.2 of the appellate order noted that out of total ₹1,43,00,000/- share capital/ share premium, ₹1,33,00,000/- was received in the earlier assessment years however, simultaneously, given a finding that ₹1,72,25,000/- has to be taken as the amount moved to the share capital/ share premium which is factually incorrect.
After hearing the rival contentions and perusing the materials available on record, we find that undisputedly, the assessee has issued share capital/ share premium of ₹1,43,00,000/- during the
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 04.03.2025.