ITO 9(2)(2), MUMBAI V. KEM LIQUORS & BEVERAGES P. LTD, THANE

ITA 686/MUM/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7162 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 29-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Diversion of income; Valuation report; Capital receipt
• Section: 142(1); 133(6); 6; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER & SHRI G MANJUNATHA, ACCOUNTANT MEMBER ITA NO.868/MUM/2014 ASSESSMENT YEAR : 2010-11 ITO 9(2)(2), MUMBAI VS. M/S. KEM LIQUORS & BEVERAGES P LTD., A/47, ROAD NO.11, WAGLE INDL. ESTATE, THANE (W), THANE 400 604 PAN AAACK3214H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAM TIWARI RESPONDENT BY : SHRI SUBODH RATNAPARKHI DATE OF HEARING :07.06.2018 DATE OF PRONOUNCEMENT : 15.06.2018 O R D E R PER G MANJUNATHA, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-20, MUMBAI, DATED 04.11.2013, AND IT PERTAINS TO ASSES SMENT YEAR 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION M ADE BY THE AO OF RS. 96,00,000/- BY TREATING THE SHARE APPLICATION MONEY AS UNEXPLAINED INCOME U/S 56(1) OF THE INCOME-TAX ACT 1961 WITHOUT APPRECIATING THE FACT THAT THE ADDITION WAS MADE AS SHARE APPLICATIO N MONEY WITH PREMIUM TOTALING TO RS. .96,00,000/- WAS INTRODUCED IN THE BOOKS THROUGH BOOK ENTRY ONLY WITHOUT ANY BANKING TRANSAC TION OR ACTUAL RECEIPTS? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION W ITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS OF EXPLAINING THE CHARGING OF HIGH PREMIUM @ RS. 1100/- PER SHARE WIT H PROPER EXPLANATION/ SUPPORTING? ITA NO.686/MUM/2014 KEM LIQUORS & BEVERAGES PVT. LTD. 2 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF LIQUOR ON CONDUCTING BASIS. IT FILED ITS RETURN OF INCOME FOR A.Y. 2010-11 ON 27.09.2010 DEC LARING TOTAL LOSS AT ` 5,32,515/. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES U/S. 143(2) AND 142(1) WERE ISSUED. IN RESPONSE TO THE NOTICES, AR FOR THE ASSESSEE APP EARED AND FILED VARIOUS DETAILS AS CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS BROUGHT IN SHARE CAP ITAL AMOUNTING TO ` 96 LACS BY ALLOTTING 8000 EQUITY SHARES, AT ` 1200/- PER SHARE, HAVING FACE VALUE OF ` 100 PER SHARE WITH A PREMIUM OF ` 1100 PER SHARE TO M/S. AMBER DISTILLERIES LIMITED, AN ASSOCIATE CONCERN OF THE ASSESSEE. THEREFORE, THE ASSESSEE WAS CALLED UPON TO FURNISH NECESSARY DETAILS INCLUDING JUSTIFICATION F OR ISSUE OF SHARES AT PREMIUM. IN RESPONSE TO NOTICE, THE ASSESSEE FILED VARIOUS DETA ILS INCLUDING BOARD RESOLUTION FOR ALLOTMENT OF EQUITY SHARES AT A PREMIUM OF ` 1100/- PER SHARE, VALUATION REPORT FROM A REGISTERED VALUER AS PER WHICH THE VALUE OF SHARE SHARES HAD BEEN DETERMINED AT ` 1150 PER SHARE ON NET ASSET VALUE METHOD. IN ORDE R TO VERIFY THE GENUINENESS OF TRANSACTIONS, THE ASSESSING OFFICER ISSUED NOTICE U/S. 133(6) TO M/S. AMBER DISTILLERIES LIMITED, AND CALLED FOR VARIOUS DETAILS FOR WHICH THE SUBSCRIBER TO THE SHARE CAPITAL M/S. AMBER DISTILLERIES LIMITED, VIDE THEIR LETTER DATED 31.12.2012 FILED THE DETAILS CALLED FOR BY THE ASSESSING OFFIC ER. 3. THE ASSESSING OFFICER AFTER CONSIDERATION OF REL EVANT SUBMISSIONS OF THE ASSESSEE AND ALSO ANALYSING THE VALUATION REPORT FI LED BY THE ASSESSEE MADE ADDITION OF ` 96 LACS U/S. 56(1) OF THE INCOME TAX ACT, 1961 FOR THE FOLLOWING REASONS: HAVING ESTABLISHED ABOVE FACTS AND IN LAW THAT TH E TRANSACTION IN QUESTION IS NOT GENUINE AND THE FORM IN WHICH IT IS BROUGHT IN TO THE BOOKS OF ASSESSEE (I.E THE INTRODUCTION OF ALLEGED SHARE PREMIUM) THE TAXABILITY OF THE SAME IN THE HANDS OF ASSESSEE UND ER SECTION 56(1) UNDER THE HEAD INCOME FROM OTHER SOURCES IS ANALYZED AS U NDER: ITA NO.686/MUM/2014 KEM LIQUORS & BEVERAGES PVT. LTD. 3 (A) IN RESPONSE TO A SPECIFIC QUESTION AS TO WHY THE AMOUNT INVOLVED SHOULD NOT BE TAXED AS ASSESSEES INCOME AS INCOME FROM OTHER SOURCES U/S.56(1) OF THE ACT., (B) HAVING ESTABLISHED THE FACT THAT THE AMOUNTS RECEIVED BY ASSESSEE IN THE GUISE OF SHARE PREMIUM IS IN FACT IS NOT A S HARE PREMIUM BUT TRANSFER OF FUNDS IN THE NATURE OF REVOCABLE TRANSF ER OF ASSET WITHIN THE MEANING OF SECTION 61 TO 63, THE SAME IS WELL WITHI N THE SCOPE OF INCOME DEFINED U/S. 5 AND THE CHARGING PROVISIONS OF SECTI ON 4 OF THE INCOME TAX ACT. THEREFORE THE INCOME ARISING BY VIRTUE OF A RE VOCABLE TRANSFER OF ASSETS SHALL BE CHARGEABLE TO INCOME-TAX AS THE INC OME OF THE ASSESSEE AND SHALL BE INCLUDED IN ITS TOTAL INCOME. (C) FURTHER THE ASSESSEE HAS NO LIABILITY TO REPAY THIS AMOUNT TO THE ALLEGED INVESTORS CONSIDERING THE EXISTENCE OF CONF LICT OF INTEREST AMONG THE ASSESSEE AND THE ALLEGED INVESTORS, THIS TRANSA CTION IS NOTHING BUT DIVERSION OF INCOME IN GUISE OF CAPITAL INVESTMENT. (D) AS PER SECTION 56(1) INCOME OF EVERY KIND WHIC H IS NOT TO BE EXCLUDED FROM THE TOTAL INCOME UNDER THIS ACT SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD INCOME FROM OTHER SOURCE S, IF IT IS NOT CHARGEABLE TO INCOME-TAX UNDER ANY OF THE HEADS SPE CIFIED IN SECTION 14, ITEMS A TO E. THIS INCOME IS NOT CHARGEABLE UNDER T HE HEADS SPECIFIED U/S. 14, ITEMS A TO E AND HENCE IS TAXABLE UNDER TH E HEAD 'INCOME FROM OTHER SOURCES'. (E) IN VIEW OF THE ABOVE STATED FACTS, THE AMOUNT O F RS.96,00,000 /- APPEARING IN THE ASSESSEES BALANCE SHEET AS SHARE PREMIUM IS TAXED AS ASSESSEE'S INCOME FOR THE YEAR UNDER THE HEAD INCOM E FROM OTHER SOURCES WITHIN THE MEANING OF SECTION 56(1) OF THE I.T. ACT, 1961. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PRE FERRED APPEAL BEFORE THE CIT(A). 4. BEFORE THE CIT(A) THE ASSESSEE REITERATED THE SU BMISSIONS MADE BEFORE THE ASSESSING OFFICER AND ALSO FILED RELEVANT DETAILS T O PROVE THE IDENTITY, GENUINENESS OF TRANSACTIONS AND ALSO JUSTIFICATION FOR ISSUE OF SH ARES AT PREMIUM OF ` 1100/- PER SHARE. THE ASSESSEE ALSO TOOK SUPPORT FROM THE DEC ISIONS OF VARIOUS HIGH COURTS AND SUPREME COURT TO ARGUE THAT THE RECEIPT OF MONE Y IS NOT AN INCOME WHICH CAN BE CONSIDERED AS INCOME ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. THE SUBMISSIONS OF THE ASSESSEE HAS BEEN REPRODUCED BY THE LEARNED CIT(A) IN HIS ITA NO.686/MUM/2014 KEM LIQUORS & BEVERAGES PVT. LTD. 4 ORDER AT PAGES 3 & 4. THE LEARNED CIT(A) AFTER CON SIDERING THE RELEVANT SUBMISSIONS OF THE ASSESSEE AND RELYING ON CERTAIN JUDICIAL PRECEDENTS OBSERVED THAT THE ASSESSING OFFICER HAS NOT ASSIGNED ANY REASONS FOR MAKING ADDITIONS TOWARDS SHARE CAPITAL INCLUDING SHARE PREMIUM OF ` 96 LACS U/S. 56(1) OF THE INCOME TAX ACT, 1961. IT IS NOT UNDERSTOOD AS TO HOW THE ASSESSING OFFICER HAS PRESUMED SUCH SHARE APPLICATION MONEY AND PREMIUM AS UNEXPLAINED INCOME U/S. 56(1) OF THE INCOME TAX ACT, 1961. THE RELEVANT PORTION OF THE ORDER OF THE CIT(A) IS EXTRACTED BELOW:- 3.3 I HAVE CONSIDERED THE ISSUE UNDER APPEAL, FIN DING OF THE ASSESSING OFFICER AND RIVAL SUBMISSION OF THE APPEL LANT, CAREFULLY. I FIND THAT LD. ASSESSING OFFICER HAS WRONGLY TAXED AN AMO UNT OF ` 96,00,000 AS UNEXPLAINED INCOME U/S. 56(1) OF THE I.T.ACT. T HE FACTS OF THE CASE IS THAT APPELLANT IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF COUNTRY LIQUOR ON CONDUCTING BASIS . IN THIS YEAR, APPELLANT HAS ISSUED 8000 EQUITY SHARES OF ` 100/- EACH AT A PREMIUM OF ` 1100/- PER SHARE TO M/S. AMBER DISTILLERIES LTD. THE SAID SHARES ARE ISSUED BY CREDITING EQUITY SHARES/SHARE PREMIUM ACC OUNT AND DEBITING THE ACCOUNT OF M/S. AMBER DISTILLERIES LTD. THUS, IT IS VERY EVIDENT THAT MONEY HAVE NOT COME TO APPELLANT NOR HAS IT FLOWN F ROM M/S. AMBER DISTILLERIES LTD. ASSESSING OFFICER HAS TAXED THE SHARE AND PREMIUM OF ` 96,00,000/- AS UNEXPLAINED INCOME WITHOUT ANY VALID GROUND. IT IS WRONG ON THE PART OF THE ASSESSING OFFICER TO PRESUME THA T THERE IS NO JUSTIFICATION FOR CHARGING OF PREMIUM AS ACCORDING TO HIM THERE IS OVER VALUATION OF ASSETS OF THE COMPANY. THE PRESUMPTIO N OF THE ASSESSING OFFICER IS NOT SUBSTANTIATED ONE BECAUSE MARKET VAL UE OF BUILDING AND LAND WHERE PLANT IS ERECTED MAY GO HIGHER THAN WDV. WDV IS NOT THE MARKET PRICE OF PLANT AND MACHINERY, LAND AND BUILD ING. ASSESSING OFFICER HAS NOT ESTABLISHED AS TO HOW SUCH ASSETS SHOULD NO T HAVE FETCHED OUT VALUE OF ` 2,73,00,000/- AGAINST WDV OF ` 43,40,333/- ASSESSING OFFICER HAS MERELY DISBELIEVED THE VALUATION WHICH CANNOT B E APPROVED. NONE OF THE REASONING GIVEN BY THE ASSESSING OFFICER IN PAR A 4.7 OF THE ASSESSMENT ORDER IS TENABLE. THERE MAY NOT BE POSI TIVE RESULTS AND SURPLUS, NEVERTHELESS HE VALUE OF THE PLOT, BUILDIN G AND PLANT AND MACHINERY MAY BE ON HIGHER SIDE AS COMPARED TO WDV HENCE IT IS WRONG ON THE PART OF THE ASSESSING OFFICER TO PRESUME THA T THERE IS NO JUSTIFICATION FOR ASCERTAINING PREMIUM FOR ALLOTMEN T OF SHARES. SHARE HAS BEEN ALLOTTED WITH PREMIUM CONSIDERING THE MARKET V ALUE OF THE ASSETS, HENCE THERE IS NO PROPRIETY TO TAX IT AS INCOME OF THE APPELLANT. SECTION 56(1) CANNOT BE INVOKED FOR SUCH GENUINE TRANSACTIO NS. 3.4 IT IS NOT UNDERSTOOD AS TO HOW ASSESSING OFFICE R HAS PRESUMED SUCH SHARE APPLICATION MONEY AND PREMIUM AS UNEXPLA INED INCOME U/S. ITA NO.686/MUM/2014 KEM LIQUORS & BEVERAGES PVT. LTD. 5 56(1) OF THE I.T.ACT. IT CAN BE SEEN FROM THE BALA NCE SHEET THAT APPELLANT HAS INCREASED SHARE CAPITAL TO 2 LACS TO 10 LACS UNDER RESERVES AND SURPLUS SHAR PREMIUM OF ` 88,00,000 HAS BEEN SHOWN. CORRESPONDING TO WHICH, THERE IS RECEIVABLE SHOWN I N THE NAME OF M/S. AMBER DISTILLERIES LTD., HENCE IT IS ONLY WAY OF MA KING ARRANGEMENT OF INTRODUCING A NEW SHAREHOLDERS BUT THAT DOES NOT ME AN THAT THERE IS A REVENUE RECEIPT IN THE HANDS OF THE APPELLANT TO BE TAXED U/S. 56 OF THE I.T.ACT. ASSESSING OFFICER HAS NOT MADE OUT THIS C ASE ON ANY LEGAL GROUND, HENCE, SUCH PRESUMPTION CANNOT BE SUSTAINED . APPELLANT FURTHER GETS SUPPORT FROM VARIOUS DECISIONS OF THE CASE OF A) PADMARAJE R KADAMBANDE VS CIT 195 ITR 877 (1992) (SC) B) CIT VS LOVELY EXPORTS (P) LTD. 216 CTR 195 (2008 ) (SC) C) CIT VS. JAGATJIT INDUSTRIES LTD. 337 ITR 21 (DEL HI) (2010) (SC) D) NIYATI B YODH VS. ACIT, 4 SOT 941 (MUMBAI) (2004 ) 5. THE LEARNED DR SUBMITTED THAT ON THE FACTS AND I N THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER TOWARDS SHARE CAPITAL INCLUDING SHARE PREMI UM AS UNEXPLAINED INCOME U/S. 56(1) OF THE INCOME TAX ACT, 1961, WITHOUT APPRECIA TING THE FACT THAT THE ADDITION WAS MADE TOWARDS CAPITAL INTRODUCED IN THE BOOKS TH ROUGH BOOK ENTRY WITHOUT ANY BANKING TRANSACTIONS OR ACTUAL RECEIPTS. THE DR FU RTHER SUBMITTED THAT THE ASSESSEE FAILED TO FILE ANY EXPLANATION FOR CHARGING EXORBIT ANT PREMIUM ON SHARES EVEN THOUGH THE COMPANY IS NOT HAVING ANY BUSINESS ACTIV ITY AND ALSO ITS ASSET VALUE IS CONSIDERABLY LESS. THEREFORE, THE ASSESSING OFFICE R WAS RIGHT IN BRINGING TO TAX SHARE CAPITAL OF ` 96 LACS AS UNEXPLAINED INCOME OF THE ASSESSEE U/S. 56(1) OF THE INCOME TAX ACT, 1961. 6. THE LEARNED AR FOR THE ASSESSEE STRONGLY SUPPORT ED THE ORDER OF THE LEARNED CIT(A) AND SUBMITTED THAT IT IS HIGHLY INCORRECT ON THE PART OF THE ASSESSING OFFICER TO MAKE ADDITIONS ON THE BASIS OF SUSPICION AND SUR MISES, IGNORING ALL THE FACTS FILED TO PROVE THE IDENTITY, GENUINENESS OF TRANSACTIONS AND JUSTIFICATION FOR ISSUE OF SHARES AT PREMIUM. THE AR FURTHER SUBMITTED THAT I T IS INCORRECT ON THE PART OF THE ASSESSING OFFICER TO PRESUME THAT ALL RECEIPTS ARE INCOME, WHICH IS CHARGEABLE UNDER THE HEAD INCOME FROM OTHER SOURCES WHEREAS, THE F ACT REMAINS THAT THE ASSESSEE HAS RECEIVED SHARE CAPITAL WHICH IS A CAPITAL RECEI PT THAT CANNOT BE MADE AS ADDITION ITA NO.686/MUM/2014 KEM LIQUORS & BEVERAGES PVT. LTD. 6 U/S. 56(1) OF THE INCOME TAX ACT, 1961. THE AR FUR THER SUBMITTED THAT THE ISSUE OF SHARES AT PREMIUM AND SUBSCRIPTION TO SUCH SHARES I S A CONTRACT BETWEEN TWO PARTIES AND WHICH IS WITHIN THE KNOWLEDGE OF PERSON , WHO ISSUE SHARES AND SUBSCRIBE TO SUCH SHARES. THE ASSESSING OFFICER DO ES NOT HAVE ANY ROLE TO PLAY AS LONG AS THE GENUINENESS OF TRANSACTIONS IS NOT DOUB TFUL. IN THIS CASE THE ASSESSEE HAS ISSUED SHARES AT PREMIUM TO ITS GROUP CONCERN T HAT TOO BY BOOK ADJUSTMENT WITHOUT ANY CASH TRANSACTION AND FURTHER SUCH ISSUE HAS BEEN JUSTIFIED WITH ENORMOUS EVIDENCES. THEREFORE, THERE IS NO REASON FOR THE ASSESSING OFFICER TO MAKE ADDITIONS U/S. 56(1) OF THE INCOME TAX ACT, 19 61. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE FACT WITH REGARD TO ISSUE OF SHARES AT PREMIUM TO ASSOCIATE ENTERPRISE OF THE ASSESSEE IS NOT DISPUTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER ALSO DID NOT DISPUTE THE FACT THAT THE ASSESSEE HAS FILED DE TAILS TO PROVE THE IDENTITY AND GENUINENESS OF TRANSACTIONS, WHICH IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE SHARES HAVE BEEN ISSUED WITHOUT ANY CASH CONSIDERAT ION. THE ASSESSING OFFICER DISPUTED SHARE PREMIUM CHARGED BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE FAILED TO JUSTIFY CHARGING HUGE PREMIUM OF ` 1100/- PER SHARE. THE ASSESSING OFFICER HAS GIVEN HIS OWN REASONS FOR DIS BELIEVING THE TRANSACTIONS BETWEEN THE ASSESSEE AND SUBSCRIBER TO THE SHARE CA PITAL. ACCORDING TO THE ASSESSING OFFICER THE RECEIPT IS UNDISCLOSED INCOME OF THE ASSESSEE, WHICH IS CHARGED TO TAX U/S. 56(1) OF THE INCOME TAX ACT, 19 61. THE ASSESSEE HAS FILED VARIOUS DETAILS INCLUDING BOARD RESOLUTION FOR ALLO TMENT OF SHARES AT PREMIUM, RETURN OF ALLOTMENT FILED WITH ROC, LEDGER EXTRACT OF BOTH THE COMPANIES TO PROVE THAT SHARES HAD BEEN ISSUED BY BOOK ADJUSTMENT BY CREDIT ING SHARE CAPITAL ACCOUNT AND DEBITING TO LOANS AND ADVANCES ACCOUNT OF M/S. AMBE R DISTILLERIES LIMITED. THE ASSESSEE ALSO FILED VALUERS REPORT FROM A REGISTER ED VALUER TO PROVE THE VALUE OF SHARES AS PER NET ASSET VALUE METHOD. THE VALUER H AS DETERMINED THE VALUE PER SHARE AT ` 1150/- ON THE BASIS OF NET ASSET VALUE METHOD. TH ESE FACTS HAVE NOT BEEN DISPUTED BY THE ASSESSING OFFICER. THE ASSESS ING OFFICER HAS MADE THE ADDITIONS ONLY ON THE BASIS OF SUSPICION BY HOLDING THAT THE ASSESSEE IS NOT HAVING ENOUGH BUSINESS AND ITS NET ASSETS AS PER AUDITED B ALANCE SHEET IS NOT SUPPORTING TO ITA NO.686/MUM/2014 KEM LIQUORS & BEVERAGES PVT. LTD. 7 DETERMINE THE VALUE OF SHARES AT ` 1150 PER SHARE. THE ASSESSING OFFICER ALSO DISPUTED THE VALUE ADOPTED BY THE VALUER FOR IMMOVA BLE PROPERTIES OWNED BY THE COMPANY WITHOUT ANY VALID REASON. THE ISSUE OF SHA RES AT PREMIUM AND SUBSCRIPTION TO SUCH SHARES IS A CONTRACT BETWEEN T WO PARTIES AND ALSO WHICH IS WITHIN THEIR KNOWLEDGE. THE ASSESSING OFFICER DOES NOT HAVE ANY ROLE TO PLAY AS LONG AS THE TRANSACTION IS GENUINE. IN THIS CASE, THE ASSESSEE HAS FILED VARIOUS DETAILS TO PROVE GENUINENESS OF TRANSACTION. IN FA CT, THE ASSESSING OFFICER NEVER DISPUTED THE GENUINENESS OF TRANSACTIONS. THE ASSE SSEE ALSO FILED VALUERS REPORT TO JUSTIFY DETERMINATION OF SHARES AT ` 1100/- PER SHARE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER COMPLETE LY ERRED IN MAKING ADDITION TOWARDS SHARE CAPITAL AND SHARE PREMIUM U/S. 56(1) OF THE INCOME TAX ACT, 1961, AS UNEXPLAINED INCOME OF THE ASSESSEE. THE HONBLE SU PREME COURT IN THE CASE OF PADMARAJE R KADAMBANDE VS. CIT (1992) 195 ITR 877 H ELD THAT AMOUNT RECEIVED AS CAPITAL RECEIPTS CANNOT BE TREATED AS INCOME WITHIN THE MEANING OF SECTION 2(24) OF THE INCOME TAX ACT, 1961. THE HONBLE SUPREME COUR T REITERATED ITS STAND IN THE CASE OF CIT VS. JAGATIJIT INDUSTRIES LTD. (2010) 33 7 ITR 21 BY HOLDING THAT MONEY RAISED THROUGH ISSUE OF EQUITY SHARES IS A CAPITAL RECEIPT, WHICH CANNOT BE TAXED AS INCOME U/S. 56(1) OF THE INCOME TAX ACT, 1961. THE ITAT MUMBAI IN THE CASE OF NIYATI B YODH VS. ACIT (2004) 4 SOT 941 HELD THAT U NLESS A RECEIPT IS IN THE NATURE OF INCOME, SAME CANNOT BE SAID TO BE IN THE NATURE OF INCOME FROM OTHER SOURCES. 8. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLL OWING THE RATIO OF CASE LAWS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO REASON FOR THE ASSESSING OFFICER TO MAKE ADDITIONS TOWARDS SHARE C APITAL OF ` 96 LACS U/S. 56(1) OF THE INCOME TAX ACT, 1961, WHEN THE ASSESSEE HAS FIL ED NECESSARY EVIDENCE TO PROVE THE ISSUE OF SHARES AT PREMIUM. THE CIT(A) AFTER C ONSIDERING RELEVANT SUBMISSIONS HAS RIGHTLY DELETED THE ADDITIONS MADE BY THE ASSES SING OFFICER. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE CIT(A) AND HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE CIT(A) AND DISMISS THE APPEAL FILED BY THE REVE NUE. ITA NO.686/MUM/2014 KEM LIQUORS & BEVERAGES PVT. LTD. 8 9. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 5 TH JUNE 2018. SD/- SD/- (JOGINDER SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED : 15 TH JUNE, 2018. SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, H BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI