The Supreme Court upheld the High Court’s decision that share premium received through share issuance is a capital account transaction and does not constitute income. The AO incorrectly categorised this as unexplained cash credit under section 68 due to alleged violations of section 78(2) of the Companies Act, 1956. The increase in the share premium account merely reflected an infusion of funds, without evidence that the funds were misused. The Supreme Court dismissed the Special Leave Petition (SLP) due to a significant 271-day delay and on the merits of the case.(AY. 2008-09 to 2012-13)
DCIT v. Shendra Advisory Services (P.) Ltd. (2025) 481 ITR 457/306 Taxman 166 (SC)? Editorial : Shendra Advisory Services (P.) Ltd v. Dy.CIT (2024) 298 Taxman 261 / (2025) 482 ITR 385 (Bom)(HC)
S. 68: Cash credits-Share premium received on issue of shares-Capital or revenue-Capital account transaction-Cannot give rise to income-Addition of entire share premium as unexplained cash credit not sustainable-Delay of 271 days-SLP dismissed on account of delay as well as on merits. [S. 4,Art. 136]
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