Bogus Share Capital Premium- The Test Of Human Probabilities Cannot Be Applied To Business Transactions: ITAT Bangalore

Bogus Share Capital Premium- The Test Of Human Probabilities Cannot Be Applied To Business Transactions: ITAT Bangalore

In the case of Janani Infrastructure Pvt. Ltd vs ACIT, ITAT Bangalore has held that:

The share premium has been collected as per the understanding reached between both the parties. We notice that the AO has not mentioned in the assessment order that the assessee has failed to satisfy the three main ingredients in the context of sec.68 of the Act. His only case was that the assessee did not substantiate the quantum of share premium collected. We have noticed that the assessee has furnished a valuation report in order to justify the share premium, even though the same has been rejected by the AO. However, the important point is that the doubt of the assessing officer on the quantum of share premium cannot be a ground for making addition u/s 68 of the Act.

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Dhanraj Sharma

Dhanraj Sharma is CEO of Tax Concept. He is on a Mission to Educate and Empower 10,000+ Professionals across the Country.

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