Addition is justified u/s 68 as shares issued at huge premium were subscribed by persons having nominal income

Addition is justified u/s 68 as shares issued at huge premium were subscribed by persons having nominal income

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Addition is justified u/s 68 as shares issued at huge premium were subscribed by persons having nominal income

ITAT justified sec. 68 additions as shares issued at huge premium were subscribed to by persons having nominal income
Ayaana Comtrade (P.) Ltd. v. Income-tax Officer, Ward-1(1)(4), Ahmedabad – [2019] 104 taxmann.com 66 (Ahmedabad – Trib.)
Assessee company had received amounts for issue of shares at huge premiums. A.O. made the additions in its income with respect to the amount of share premium received claiming that the same were unexplained credits assessable u/s 68.
Assessee filed an appeal to the CIT (Appeals) against the order of the A.O. claiming the reversal of such additions. CIT (A) confirmed the additions made by the A.O. contending that no justification was given by the assessee as to why the shares could be subscribed to at such a higher premium, that too by the persons who had very nominal income. Additionally, when he asked the assessee to present the shareholders, he had failed to do so. It was also noted that in accounts of share applicants, identical amount of deposits were made before issuance of cheques for share applications.
Then, Assessee filed appeal to ITAT as well which further dismissed the appeal upholding the observations made by the CIT(A) and confirmed his order.

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