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TMI Blog2019 (9) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... o premium whatsoever. There is no other basis on which the addition made by the AO and confirmed by the CIT(Appeals) can be sustained. Addition made by the AO and confirmed by the CIT(A) is unsustainable and the same is directed to be deleted. - Decided in favour of assessee. - ITA No. 618/Bang/2019 - - - Dated:- 17-7-2019 - SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER For The Appellant : Shri H. Padamchand Khincha, CA For The Respondent : Shri Vikas Suryavamshi, Addl.CIT(DR)(ITAT), Bengaluru ORDER Per N V Vasudevan, Vice President This is an appeal by the assessee against the order date 26.03.2019 of the CIT(Appeals), Bengaluru-2, Bengaluru relating to assessment year 2015-16. 2. The only issue that arises for consideration in this appeal is with regard to the correctness of an addition of ₹ 5,09,04,876 made by the Assessing Officer (AO). 3. The aforesaid addition was made by the AO under the following facts and circumstances. The assessee is a company engaged in the business of commercial training of compute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share PAN status 1. Ali Said Ali Al Urami Foreign 4,00,000 5% No PAN 2. Dr. Abdullah Saif Ahmed Al Sabahi Foreign 1,68,87,750 30% No PAN 3. Dr. M Shareef Foreign 18,047 No PAN 4. Lefeer Muhamed Foreign 2,43,88,000 35% AGEPR1378 5. Shatoon Enterprises Foreign 88,83,919 No PAN 6 . The qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny , venture capital fund and venture capital undertaking shall have the meanings respectively assigned to them in clause (a), clause (b) and clause (c) of Explanation to clause (23FB) of section 10; 7. In reply to the aforesaid query of AO, the assessee pointed out that ( i) the provisions of section 56(2)(viib) applies only to issue of shares. Since the assessee has received only share application money, those provisions are not attracted; ( ii) the aforesaid provisions are applicable only when shares are issued for a consideration which exceeds face value in such shares. Since there was no premium charged by the assessee, there is no question of invoking the aforesaid provisions; and ( iii) the aforesaid provisions are applicable only for receipt of consideration for issue of shares by a person, who is a resident and since the persons from whom the assessee received share application money were non-residents, the aforesaid provisions are not applicable. 8. The assessee submitted that the fact that share application money received exceeds the authorized sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Capital'. For the same reason it cannot treated as capital receipt. As such the money received in excess of Authorized Share Capital cannot be termed as received for 'equity contribution'. The AR's submission is clearly an afterthought and doesn't hold water. 11.4. In view of the above, the money received and claimed as in excess of Authorized Share Capital can only fall under the head 'Income from Other Sources' under the Income Tax Act, 1961. Hence, an amount of Rs. ₹ 5,09,04,876/- is treated as 'income from other sources' and is added to the returned income. Add: ₹ 5,09,04,876/- 10. On appeal by the assessee, the CIT(Appeals) confirmed the action of the AO. The CIT(A) did not address the contention of assessee as were put forth before the AO. Aggrieved, the assessee is in appeal before the Tribunal. 11. The ld. counsel for the assessee reiterated the submissions as were made before the AO. He also brought to our notice that if the provisions of section 68 are sought to be applied, the AO or the CIT(A) has not brought on record as to which of the three ingredi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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