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TMI BlogShare Premium Addition u/s 68: Demystifying Share Premium TransactionsX X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue contended that the assessee company allotted shares to five individuals on 30.03.2012 without any premium at the face value of Rs. 10/-, and on the very next day, 31.03.2012, allotted shares to two companies with a share premium of Rs. 4990/- per share. The revenue argued that the assessee failed to comply with the summons issued u/s 131 of the Act and did not provide a satisfactory explanation for the significant difference in share premiums charged on consecutive days. Assessee's Arguments The assessee argued that the summons u/s 131 was never served, and even if it was, the assessee had responded to the notice u/s 142(1) by providing all the required details. The assessee claimed that the premium was justified as the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence in share premiums charged on consecutive days, the lack of business activities or asset base to justify such a high premium, and the questionable financial standing of the subscribing companies all contributed to the court's decision. The court upheld the findings of the lower authorities, concluding that the assessee did not discharge the burden of proof and that no substantial question of law arose for consideration. Consequently, the appeal was dismissed. Relied upon or Followed Judgements The court relied upon the following judgements in its analysis: SHANKAR INDUSTRIES VERSUS COMMISSIONER OF INCOME-TAX, CENTRAL, CALCUTTA - 1978 (3) TMI 91 - CALCUTTA HIGH COURT COMMISSIONER OF INCOME TAX VERSUS NIPUN BUILDERS DEVELPERS PVT. LT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of proof. The assessee must provide cogent and reliable evidence to substantiate the genuineness of the transactions, failing which the addition u/s 68 would be justified. The court also discussed the doctrine of source of source and cautioned against its misuse as a means to circulate unaccounted money. The doctrine should be applied judiciously, considering the factual matrix of each case. Ultimately, the court found that the assessee failed to establish the required elements u/s 68 and dismissed the appeal, upholding the findings of the lower authorities. Full Text : 2024 (5) TMI 710 - CALCUTTA HIGH COURT - FAQ - Frequently Asked Questions, TMI Short Notes , Experts comment, opinion Tax Management India - taxmanagementindia - taxmana ..... X X X X Extracts X X X X X X X X Extracts X X X X
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