No bar on collecting higher share premium as valuation certificate prescribes only minimum sum to be collected

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No bar on collecting higher share premium as valuation certificate prescribes only minimum sum to be collected

IT: Where AO made addition to assessee’s income under section 68 in respect of share premium collected over and above premium worked out in Valuation Certificate submitted to RBI, in view of fact that as per Notification No. FEMA/203/2010-RB, dated 7-4-2010, share premium amount worked out in Valuation Certificate is minimum amount that can be collected by assessee and, hence, there is no bar on collecting higher amount as share premium, impugned addition was to be deleted

Section 68 of the Income-tax Act, 1961 – Cash credits (Share premium) – Assessment year 2012-13 – During relevant year assessee issued shares, to NSR, Mauritius, a SEBI registered Venture Capital Fund at a premium of Rs. 1030/- per share – In valuation certificate submitted to Reserve bank of India, price of share was worked out at Rs. 682/- per share, consisting of Rs. 10/- par value plus premium of Rs. 672/- per share – Assessing Officer took a view that premium collected by assessee over and above premium worked out in Valuation Certificate was unjustified and, accordingly, assessed same as income of assessee under section 68 – Whether in terms of Notification No. FEMA/203/2010-RB, dated 7-4-2010, share premium amount worked out in Valuation Certificate is minimum amount that can be collected by assessee and, hence, there is no bar on collecting higher amount as share premium – Held,yes – Whether even otherwise, since there was no dispute about identity, creditworthiness of investor and genuineness of transactions, Assessing Officer was not justified in partially not accepting share premium received by assessee – Held, yes – Whether in view of aforesaid, impugned addition deserved to be deleted – Held, yes

 

Varsity Education Management (P.) Ltd

 

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