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TMI Blog2020 (5) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of shares was negative - AO has ignored the fact on record that the assessee has purchased land at the cost of ₹ 3.19 crores at Village Khirki Daula which adequately supports the share premium raised by the assessee. There is no iota of evidence about the concealment or plough back of undisclosed income to the assessee - AO has not disputed the identity, genuineness and creditworthiness of the share holders. Hence, the invocation of the provisions of Section 68 for the simple reason of non filing the valuation report by the assessee and by not referring the cost of the land to the DVO, and without bringing any material on record to fulfill the criteria of Section 68, cannot be justified in this case.- Decided against revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the order of the ld. CIT(A)-4, New Delhi dated 28.12.2015. 2. Following grounds have been raised by the revenue: 1. On the facts and circumstances of the case and in law, Ld. CIT( A) has erred in deleting the disallowance made on account of share capital loss of ₹ 1,27,35,000/- u/ s 68 of the Act. 2. On the facts and circumstances of the case and in law, Ld. CIT(A) erred in disregarding the fact that worth of the assessee, share capital and other long term liabilities were negative and that the assessee had no assets on which premium of shares can be valued at ₹ 90 /- as against face value of ₹ 10. 3. On the facts and circumstances of the case, Ld. CIT(A) erred in not appreciating the fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the course of assessment proceedings, it is noticed that the assessee company had issued 1,41,500 shares of face value of ₹ 10/- each at a premium of ₹ 90 /- per share. The assessee was asked to explain on what basis it has valued its share with reference to assets and liabilities of the assessee company. The assessee was also asked to prove the identity, creditworthiness and genuineness of the parties who have subscribed the above share premium. In response, the assessee vide letter dated 11.02.2015 has submitted as under: During the year under consideration assessee company had issued 1, 41, 500 shares of face value of ₹ 10/- per share at a premium of ₹ 90 /- per share. In fact during the year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added to the total income of the assessee. 4. The ld. CIT ( A) deleted the addition on the grounds that the identity, creditworthiness and genuineness of the transaction has been proved by the assessee and there was no material before the revenue to assume that it was the assessee s own money that has come back to the system in the form of share premium. 5. Before us, the ld. DR relied on the order of the Assessing Officer while the ld. AR supported the order of the ld. CIT (A). 6. Heard the arguments of both the parties and perused the material available on record. 7. We find that the share premium of ₹ 90/- per share has been contributed by the share holders owing to various facts that the company had purchased the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case. Addition u/s 2( 22)(e): 8. During the year under consideration, it was observed by the AO that the assessee company has received an amount of ₹ 1,13,00,000 /- and ₹ 14,00, 000/- from M/s AIM Infotech City Pvt. Ltd. and M/s AIM Housing Construction Pvt. Ltd respectively as advance against purchase of Land and for the purpose of construction. Against these transactions, the above companies have executed agreements. The AO noticed that the assessee did not purchase any property nor started any construction activity. It was noticed that both the above companies are related companies to the assessee company by the virtue of a common director share holder. From the perusal of the share holding pattern of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o which the company in either case possesses accumulated profits. 13. As per the provisions of the Act it needs to meet the conditions in the instant case that Sh. Allimudin should have been a share holder in the companies paying the amount and also he should have been having a substantial interest in the assessee company. Section 2(32 ) refers to person who has a substantial interest in the company in relation to a company means a person who is the beneficial owner of the shares not being shares entitled to a fixed rate of dividend whether with are without a right to participate in profits carrying not less than 25 % of voting power. Further, in order to tax the receipt, it has to be proved that the amounts received has been utilized ..... X X X X Extracts X X X X X X X X Extracts X X X X
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