“share capital and share premium”

Cash Credits & Unexplained ItemsSection 68Section 68694 judgments

The decision most relied on for share capital and share premium is CIT v. Divine Leasing & Finance Ltd. (299 ITR 268), cited in 426 judgments on BharatTax.

Leading authorities on share capital and share premium

CIT v. Divine Leasing & Finance Ltd.

299 ITR 268 · 2008 · High Court

426

citing judgments

The Assessing Officer cannot add share capital or share premium amounts if the assessee provides the identity and creditworthiness of the subscriber and establishes the genuineness of the transaction. The court may admit additional evidence under Rule 46A, such as the PAN identity of the creditor.

CIT v. Gagandeep Infrastructure (P.) Ltd.

394 ITR 680 · 2017 · High Court

303

citing judgments

Under Section 68, an assessee is only required to prove the identity and creditworthiness of the immediate creditor or share subscriber and the genuineness of the transaction. The assessee is not obligated to establish the 'source of the source' of funds or the creditworthiness of sub-lenders, as this information may not be within the assessee's special knowledge.

Vodafone India Services (P.) Ltd. v. Union of India

368 ITR 1 · 2014 · High Court

172

citing judgments

The issue of shares and share premium is a capital account transaction, not an income-generating event, therefore Chapter X (Transfer Pricing) provisions are not attracted to deem notional or hypothetical income from such transactions.

MOD Creation Pvt Ltd. v. Case

354 ITR 282 · 2013 · High Court

154

citing judgments

Under Section 68 of the Income-tax Act, the initial burden is on the assessee to establish the authenticity of transactions for unexplained credits. Once authenticity is proven, this burden shifts, and the assessee is not required to prove the genuineness or source of funds of the creditor beyond this.

CIT v. Ultra Modern Exports (P.) Ltd.

40 Taxmann.com 458 · 2013 · High Court

135

citing judgments

An addition under Section 68 for cash credits like share capital or premium cannot be sustained if the assessee provides the identity, creditworthiness, and genuineness of the transaction, and the Assessing Officer fails to conduct further enquiries into the 'source of source' or the ultimate source of funds of the investor/creditor.

CIT v. Empire Builtech (P.) Ltd.

366 ITR 110 · 2014 · High Court

110

citing judgments

For additions under Section 68 related to share capital and premium, the assessee must prove the genuineness of the transaction and the creditworthiness of the investors, beyond merely disclosing their identities. Additions are permissible for amounts attributable to investors whose particulars remain unverified or who fail to respond to inquiries.

PCIT v. Paradise Inland Shipping Pvt. Ltd.

84 Taxmann.com 58 · 2017 · High Court

citing judgments

In reassessment proceedings initiated on the ground that companies providing share capital were non-existent, if the assessee provides documentary evidence of their existence, the burden shifts to the revenue to establish reasons for reassessment.

Jatia Investment Co. v. CIT

206 ITR 718 · 1994 · High Court

citing judgments

An addition under Section 68 for unexplained cash credits cannot be made when there is no actual cash credit or flow of funds, such as in cases of share swaps or notional credits.

Judgments citing share capital and share premium

Alchemist Touchnology, New Delhi vs. ACIT, Central Circle-20, New Delhi

ITA 1689/DEL/2022[2013-14]Status: DisposedITAT Delhi11 Mar 2024AY 2013-14

Bench: Shri C. N. Prasad & Shri M. Balaganeshalchemist Touchnology, Vs. Acit, Building No. 23, Nehru Central Circle-20, Place, Alchemist House, Delhi South Delhi-110019 (Appellant) (Respondent) Pan:Aaica1617Q Assessee By : Shri N. K. Lal, Ca Revenue By: Shri Zafarul Haque Tanweer, Cit Dr Date Of Hearing 10/01/2024 Date Of Pronouncement 11/03/2024

For Appellant: Shri N. K. Lal, CAFor Respondent: Shri Zafarul Haque Tanweer, CIT DR

Section 132Section 153ASection 153CSection 153DSection 245D(1)Section 69

absolutely no dispute that the assessee had indeed received this sum of 18621973.93 USD equivalent to Rs 100 crores as share capital and share premium from LGF Cyprus under FDI route. We find that the assessee had furnished the following documents before the lower authorities :- a) Opinion

Silkina Commodeal Pvt. Ltd., Kolkata vs. ITO, Ward-3(3), Kolkata.

In the result, appeal of the assessee is allowed

ITA 1161/KOL/2023[2011-12]Status: DisposedITAT Kolkata06 Mar 2024AY 2011-12

Bench: Shri Sonjoy Sarma & Shri Girish Agrawalassessment Years: 2011-12 Silkina Commodeal Pvt. Ltd. Income Tax Officer, Ward- 6, Waterloo Street, Kolkata- Vs. 3(3), Kolkata. 700069. (Pan: Aaecs5627C) (Appellant) (Respondent)

For Appellant: Shri Siddarth Agarwal, AdvocateFor Respondent: Shri B. K. Singh, JCIT, Sr. DR

Section 147Section 148Section 68

. We have also taken note of the basis of addition which has been noted as amount received towards issue of share capital and share premium by the assessee to the respective company from whom the amount is received as not a correct fact. 9.1. Identical issue come

Silkina Commodeal Pvt. Ltd., Kolkata vs. ITO, Ward 3(3), Kolkata

In the result, appeal of the assessee is allowed

ITA 1439/KOL/2023[2012-13]Status: DisposedITAT Kolkata05 Mar 2024AY 2012-13

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Siddarth Agarwal, AdvocateFor Respondent: Shri Arup Chatterjee, Addl. CIT

Section 147Section 148Section 271(1)(c)Section 68

case of issue of shares by the assessee to these companies. It is not an amount received towards subscription of share capital and share premium from these companies as stated by the AO while making the addition. 6.1. It was submitted that the reasons to believe recorded ... been noted by the authorities below as amount Silkina Commodeal Pvt. Ltd. AYs 2010 -11 & 2012-13 received towards issue of share capital and share premium by the assessee to the respective companies from whom the amount is received, as not a correct fact. 13.1. Considering all these

Silkina Commodeal Pvt. Ltd., Kolkata vs. ITO, Ward-3(3), Kolkata

In the result, appeal of the assessee is allowed

ITA 1438/KOL/2023[2010-11]Status: DisposedITAT Kolkata05 Mar 2024AY 2010-11

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Siddarth Agarwal, AdvocateFor Respondent: Shri Arup Chatterjee, Addl. CIT

Section 147Section 148Section 271(1)(c)Section 68

Silkina Commodeal Pvt. Ltd., Kolkata vs. ITO, Ward-3(3), Kolkata

In the result, appeal of the assessee is allowed

ITA 1437/KOL/2023[2010-11]Status: DisposedITAT Kolkata05 Mar 2024AY 2010-11

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Siddarth Agarwal, AdvocateFor Respondent: Shri Arup Chatterjee, Addl. CIT

Section 147Section 148Section 271(1)(c)Section 68

Nano Infra Promoters Pvt. Ltd., Kolkata vs. ITO, Ward-7(1), Kolkata

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 290/KOL/2023[2012-13]Status: DisposedITAT Kolkata29 Feb 2024AY 2012-13

Bench: Sri Rajesh Kumar & Sonjoy Sarma

Section 131Section 142(1)Section 68

company in order to secure their presence. However, no compliance made to the said summons. Finally, the AO added the entire share capital and share premium to the tune of Rs. 1.21 Crore to the income of the assessee vide order dated 13.02.2015. as unexplained cash credit ... details Page 4 of 10 I.T.A. No.: 290/KOL/2023 Assessment Year: 2012-13 Nano Infra Promoters Pvt. Ltd. in support of share capital and share premium raised by the assessee beside the details of the investors vide written submissions dated 9.6.2014 filed in reply to notice dated 5.5.2014 issued

M/S Kalyani Barter Pvt. Ltd., Kolkata vs. DCIT, Cir-2(1), Kolkata

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 414/KOL/2019[2012-13]Status: DisposedITAT Kolkata26 Feb 2024AY 2012-13

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.414/Kol/2019 Assessment Years: 2012-13 Vs. Kalyani Barter Pvt. Ltd. Dcit, Circle-2(1), Kolkata 2, Ganesh Chandra Avenue, 2Nd Floor, Room No. 5, Kolkata-700013. (Pan: Aacck7579D) (Appellant) (Respondent) Appearances By: Shri Miraj D. Shah, Ar Appeared For Appellant. Shri S. Dutta, Cit, Dr Appeared For Respondent. Date Of Concluding The Hearing : 20.02.2024 Date Of Pronouncing The Order : 26.02.2024 Order Per Manish Borad: This Appeal Filed By The Assessee Pertaining To The Assessment Year (In Short “Ay”) 2012-13 Is Directed Against The Order Passed U/S 250 Of The Income Tax Act, 1961 In Short The “Act”) By Ld. Commissioner Of Income-Tax (Appeals)-1, Kolkata [In Short Ld. “Cit(A)”] Dated 22.01.2019 Arising Out Of The Assessment Order Passed U/S 143(3) Of The Act By Ld. Dcit, Circle-2(1), Kolkata. 2. Assessee Has Effectively Raised Four Grounds Of Which Two Relate To Addition U/S. 68 Of The Act On Account Of Unexplained Share Capital & Unsecured Loan, One Relates To Disallowance U/S. 14A Of The Act & Through Ground No. 4 It Has Claimed That The Order Passed By Ld. Cit(A) U/S. 250 Of The Act Is Not Correct Confirming The Arbitrary Disallowances/Additions.

Section 143(2)Section 143(3)Section 14ASection 250Section 68

validly serving notices u/s. 143(2) and 142(1) of the Act, the assessee was asked to explain the source of share capital and share premium amounting to Rs.6.55 Cr. as well as nature and source of unsecured loan of Rs.1.27 Cr. Though submissions were made

True-Man Consultants Pvt. Ltd., Kolkata vs. ITO, Ward-7(2), Kolkata.

In the result, the appeal filed by the assessee is partly allowed

ITA 1158/KOL/2023[2012-13]Status: DisposedITAT Kolkata23 Feb 2024AY 2012-13

Bench: Sri Rajpal Yadav & Dr. Manish Borad

Section 131Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 68

During the course of assessment proceedings, ld. AO noticed that during the year assessee has received sum towards share capital and share premium amounting to Rs. 6.52 Crore. Detailed questionnaire was issued u/s 142(1) of the Act. Notice u/s 131 of the Act was issued ... addition u/s 68 of the Act for the alleged unexplained cash credit of Rs. 6.52 Crore received by the assessee towards share capital and share premium. Ld. AO also made disallowance u/s 14A of the Act of Rs. 1,02,350/- observing that the assessee had made investments

I.T.O, Ward-6(1).Kolkata, Kolkata vs. Digvijay Vinimay (P) Ltd., Kolkata

ITA 700/KOL/2023[2012-13]Status: DisposedITAT Kolkata22 Feb 2024AY 2012-13

Bench: Sri Rajpal Yadav & Dr. Manish Borad

Section 143(3)Section 250Section 253Section 68

scrutiny and during the course of assessment proceedings, the Assessing Officer (in short ld. 'AO') noticed that the assessee has received share capital and share premium totalling to Rs. 2.45 Crore (share capital of Rs. 4.90 Lakh and share premium

M/S. Tabassum Dealers Pvt. Ltd., Kolkata vs. ITO, Ward-4(1), Kolkata.

In the result, the appeal of the assessee is dismissed

ITA 914/KOL/2023[2012-13]Status: DisposedITAT Kolkata21 Feb 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Rajesh Kumar]

Section 143(3)Section 68

ground no. 2 is against the confirmation of addition of Rs. 45,00,00,000/- by the AO on account of share capital and share premium as unexplained cash credit u/s 68 of the Act. 4. After perusing the assessment order as well as appellate order, we observe

M/S. Brightstar Vincom Pvt.Ltd., 700007 vs. I.T.A, Ward-3(3), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 176/KOL/2023[2012-13]Status: DisposedITAT Kolkata21 Feb 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. No.176/Kol/2023 Assessment Year: 2012-13 M/S Brightstar Vincom Pvt. Ltd…..…......................…...……………....Appellant 18/1, 4Th Floor, Room No.48, M.D. Road, Burrabazar, Kolkata-700007. [Pan: Aadcb2082R] Vs. Ito, Ward-3(3), Kolkata........…..........................................…..…..... Respondent Appearances By: Shri Miraj D. Shah, Ar, Appeared On Behalf Of The Appellant. Shri Abhijit Kundu, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : December 14, 2023 Date Of Pronouncing The Order : February 21, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 30.01.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal:

Section 142(1)Section 234Section 250Section 68

would reveal that the assessee has agitated against the addition of Rs.3,58,00,000/- made by the Assessing Officer treating share capital and share premium received by the assessee as unexplained income of the assessee u/s 68 of the Act. 4. At the outset, the ld. counsel

Vish Realty Solutions Private Limited, Kolkata vs. I.T.O., Ward-5(3), Kolkata

In the result, appeal of the revenue is dismissed

ITA 250/KOL/2020[2012-13]Status: DisposedITAT Kolkata21 Feb 2024AY 2012-13

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 250/Kol/2020 Assessment Year: 2012-13 Vish Realty Solutions Private Limited Income Tax Officer, Ward-5(3), 55, Ezra Street Vs Kolkata 2Nd Floor Kolkata - 700001 [Pan : Aadcv9938N] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri S. Jhajharia, A/R Revenue By : Shri Vineet Kumar, Addl. Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 16/01/2024 घोषणा क" तारीख /Date Of Pronouncement: 21/02/2024 आदेश/O R D E R Per Dr. Manish Borad: The Present Appeal Is Directed At The Instance Of The Assessee Against The Order Of The Commissioner Of Income Tax (Appeals) -10 (Hereinafter The “Ld. Cit(E)”) Dt. 02/12/2019, Passed U/S 263 Of The Income Tax Act, 1961 (“The Act”) For The Assessment Year 2012-13. 2. The Assessee Has Raised The Following Grounds Of Appeal:- “1. That The Learned Commissioner Of Income Tax (Appeals)-Io, Kolkata Erred In Passing An Order Dated 2Nd Of December, 2019 Under Section 143(3) Of The Income Tax Act, 1961 Dismissing The Appeal Of The Appellant Without Allowing Reasonable Opportunity Of Being Heard. 2. That The Learned Commissioner Of Income Tax (Appeals) - 10, Kolkata Erred In Confirming The Addition Of Share Application Money Ofrs. 5,86,00,000/- Made By The Assessing Officer Under Section 68 Of The Income Tax Act, 1961 On Irrelevant Considerations & Arbitrary Grounds.

For Appellant: Shri S. Jhajharia, A/RFor Respondent: Shri Vineet Kumar, Addl. CIT, D/R

Section 143(2)Section 143(3)Section 14ASection 263Section 68

held that the assessee had been unable to explain the nature and source of this share application money which included share capital and share premium totaling to Rs.5.86 Crores, on account of issue of share of face value of Rs.10/- and premium of Rs. 490/- received ... held that the assessee had been unable to explain the nature and source of this share application money which included share capital and share premium totaling to Rs.3.59 Crores, on account of issue of share of face value of Rs.10/- and premium of Rs.90/- received from

DCIT Central Circle-15, New Delhi vs. Dmg Finance Investment Pvt. Ltd., Delhi

ITA 3429/DEL/2023[2012-13]Status: DisposedITAT Delhi20 Feb 2024AY 2012-13

Bench: Shri Shamim Yahya & Shri Challa Nagendra Prasadआ.अ.सं/.I.T.A No.3429/Del/2023 िनधा"रणवष"/Assessment Year:2012-13 बनाम Dcit Dmg Finance Investment P. Ltd. Central Circle-15, Vs. Flat No.1, First Floor, Room No.245, 2Nd Floor, Dakshineshwar, 10 Hailey Road, E-2, Ara Centre, New Delhi. Jhandewalan Extension, New Delhi. Pan No. Aaacd3459K अपीलाथ" Appellant ""यथ"/Respondent

Assessing Officer (for short referred as the “AO”) on account of 1 I.T.A.No.3429/Del/2023/A.Y.2012-13 DMG Finance Investment Pvt. Ltd. share capital and share premium received by the assessee from M/s Ample Hotel & Resorts Pvt. Ltd. 3. At the time of hearing, the Ld. Counsel for the assessee submits

Baba Iron Industries Pvt. Ltd., Kolkata vs. ITO, Ward-9(1), Kolkata.

ITA 925/KOL/2023[2012-13]Status: DisposedITAT Kolkata19 Feb 2024AY 2012-13

Bench: Sri Rajpal Yadav & Dr. Manish Borad

Section 143(3)Section 144Section 144BSection 249Section 253Section 254Section 263Section 3Section 5

companies. Before we embark upon an inquiry on the facts of the present appeal, in order to find out whether the share capital and share premium money received by the assessee during the year is required to be treated as its unexplained credit and deserves to be added ... share capital in private limited company on one hand and public limited company on other hand, would be different. The share capital and share premium are basically irreversible receipts or credits in the hands of the companies. Share capital is considered to be cost of shares

M/S Kohinoor Steel Pvt. Ltd., Kolkata vs. I.T.O., Ward-3(3), Kolkata

In the result, the appeal filed by the assessee in ITA No

ITA 27/KOL/2020[2012-13]Status: DisposedITAT Kolkata19 Feb 2024AY 2012-13

Bench: Dr. Manish Borad & Shri Anikesh Banerjee]

Section 14Section 143(3)Section 15Section 250Section 68Section 9

against the assessee with an addition amount to Rs. 83,75,000/- u/s 68 of the Act related to transaction of share capital and share premium which was taken from different entities against the high premium. 3 I.T.A. No.27/Kol/2020 Assessment Years: 2012-13 M/s Kohinoor Steel

Dreamtech Constructions Pvt. Ltd., New Delhi vs. DCIT Circle-7(1), New Delhi

In the result, Appeal filed by the assessee in ITA No

ITA 91/DEL/2021[2012-13]Status: DisposedITAT Delhi16 Feb 2024AY 2012-13

Bench: or at the time of hearing of the appeal.”

Section 143(3)Section 68

completed the assessment u/s 143(3) vide order dated 31.03.2014 after making addition of Rs.18,31,16,000/- on account of share capital and share premium, Rs.1,47,50,000/- on account of unsecured loan u/s 68 and Rs.1 lac on account of expenses claimed for buy back ... Securities Pvt. Ltd. The AR of the Assessee was asked to submit the identity, creditworthiness of both the parties from whom share capital and share premium were received. The Assessee's Representative in turn filed the acknowledgement of M/s Dreamtech Vs. DCIT return filed by both the parties

Dreamtech Constructions Pvt Ltd., Delhi vs. DCIT Circle-10(1), New Delhi

In the result, Appeal filed by the assessee in ITA No

ITA 90/DEL/2021[2011-12]Status: DisposedITAT Delhi16 Feb 2024AY 2011-12

Bench: or at the time of hearing of the appeal.”

Section 143(3)Section 68

Feather Infotech P.Ltd, Delhi vs. DCIT, Gurgaon

In the result, the captioned appeal of the assessee in ITA No891/Del/2022 concerning

ITA 977/DEL/2022[2009-10]Status: DisposedITAT Delhi13 Feb 2024AY 2009-10

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Shri C.S. Anand, AdvocateFor Respondent: Shri T. James Singson, CIT-D.R

Section 132Section 143(3)Section 153ASection 153A(1)(b)Section 153C

group concerns were in the business of providing the entries to convert the unaccounted money into garb of share capital and share premium. As per seized document in the case of assessee, (i) M/s. Kanha Fats ITA No.891 & 977/Del/2022 3 & Oils Pvt. Ltd. had applied for allotment

Feather Infotech P.Ltd, Delhi vs. DCIT, Gurgaon

In the result, the captioned appeal of the assessee in ITA No891/Del/2022 concerning

ITA 891/DEL/2022[2013-14]Status: DisposedITAT Delhi13 Feb 2024AY 2013-14

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Shri C.S. Anand, AdvocateFor Respondent: Shri T. James Singson, CIT-D.R

Section 132Section 143(3)Section 153ASection 153A(1)(b)Section 153C

Dreamz Vanijya (P)Ltd, Nagpur vs. ITO, Kolkata

In the result, appeal of the assessee is allowed for statistical purposes

ITA 522/KOL/2023[2011-12]Status: DisposedITAT Kolkata08 Feb 2024AY 2011-12

Bench: Sri Rajpal Yadav & Dr. Manish Borad

Section 133(6)

cash deposit in these companies was layered through multiple accounts to reach the ultimate beneficiaries in the form of share capital and share premium. He observed that assessee is one of the beneficiaries and therefore, assessment of the assessee deserves to be re-opened. Accordingly, he re-opened