DCIT CIRCLE - 16(1), NEW DELHI vs. ARUNA CHANDHOK, NEW DELHI

ITA 387/DEL/2021Status: DisposedITAT Delhi05 September 2023AY 2015-16Bench: Shri M. BALAGANESH (Accountant Member), Shri Anubhav Sharma (Judicial Member)6 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that bonus shares are issued from capitalization of existing reserves and do not result in an increase in shareholder wealth. Therefore, Section 56(2)(vii)(c) is not applicable to bonus shares.

What were the facts?

The assessee received bonus shares and bonus units, which the Assessing Officer sought to tax under Section 56(2)(vii)(c) of the Income Tax Act. The assessee contended that bonus shares are a capitalization of profits and do not increase shareholder wealth.

What were the issues?

Whether the receipt of bonus shares is taxable as income from other sources under Section 56(2)(vii)(c) of the Income Tax Act, and whether the cost of acquisition for bonus shares is Nil.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(c),Section 55(2)(aa)(i)

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Income Tax Appellate Tribunal, Delhi Bench “A”: New Delhi

Before: Shri M. BALAGANESH & Shri Anubhav Sharma

For Appellant: CA Shri R. K. Kapoor, CA
For Respondent: Shri P. Praveen Sidharth, CIT DR
Hearing: 26/06/2023Pronounced: 05/09/2023

PER M. BALAGANESH, A. M.:

1.

The appeal in ITA No.387/Del/2021 for AY 2015-16, arise out of the order of the Commissioner of Income Tax (Appeals)-37, New Delhi [hereinafter referred to as „ld. CIT(A)‟, in short] in Appeal No. 37/10221/2018-19, A.Y. 2015-16 dated 22.09.2020 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 28.12.2017 by the Assessing Officer, DCIT, Circle-16 (2), New Delhi (hereinafter referred to as „ld. AO‟).

2.

The revenue has raised the following grounds of appeal :-

“1. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in deleting the addition of Rs. 37,56,83,191/- made u/s 56(2)(vii)(c) of the Income Tax Act

The order continues below.

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