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December 2022

42. Where the identity of the shareholders has been established, no addition could be made u/s 68 with respect to the increase in share capital and share premium.

By Jagdish Punjabi, Chartered Accountant
Devendra Jain, Advocate
Reading Time 3 mins
Greensaphire Infratech (P.) Ltd. vs. Income-tax Officer
[2022] 95 ITR(T) 464 (Amritsar - Trib.)
ITA No.:213 (ASR.) of 2017
A.Y.: 2012-13
Date of order: 23rd December, 2021
Section: 68

42. Where the identity of the shareholders has been established, no addition could be made u/s 68 with respect to the increase in share capital and share premium.

FACTS

The assessee company during the year under consideration had issued shares to five individuals and two body corporates by way of share capital and share premium.

In the course of assessment proceedings, the AO called for certain details about the issue of share capital. The assessee furnished certain explanations with respect to the details of shares issued. Not being satisfied with the identity and genuineness of the allottees, the AO invoked section 68 of the Act and treated the issue of share capital and premium as income of the assessee.

Aggrieved, the assessee filed an appeal before the CIT(A), however, the appeal of the assessee was dismissed. Aggrieved, the assessee filed further appeal before the ITAT.

HELD

The assessee submitted that the transaction was carried out through normal banking channels and the identity of subscribers to the company had been established through various documents namely, the financial statements, PANs of the allottees, the Memorandum of Association and
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