The appeal is against the order of the CIT (A). The primary contention is regarding the addition made by the Assessing Officer under section 68 of the Income Tax Act, 1961.

The Assessing Officer noted that the assessee company issued shares of face value Rs.10 at a premium of Rs.90/-during a period where the company had no business income. Despite multiple notices and summons, there was a lack of compliance on the part of the assessee.

The Assessing Officer, based on the available records, treated the share capital along with share premium as unexplained income. The CIT (A) upheld the Assessing Officer’s decision, noting that the share capital subscribing company did not have any financial credibility. The assessee argued that the investor company’s source was from the sale proceeds of shares, but no such details were provided to the lower authorities.

The Hon’ble Tribunal decided that the entire issue needs to be re-examined by the Assessing Officer, offering the assessee an opportunity to present its case. (AY .2012-13)