| Question And Answer | |
|---|---|
| Subject: | pre AY 13-14 share premium |
| Category: | Income-Tax |
| Querist: | bs |
| Answered by: | Law Intern |
| Tags: | section 56(2)(viib), Share premium, Unexplained cash credit |
| Date: | September 29, 2025 |
Can AO add share premium u/s 68 when share capital for the same is not added ?
any case law ?
56[2]viib was non existent in earlier years !
Even prior to section 56(2)(viib), addition of unexplained credits such as share premium etc could be assessed u/s 68 as was done in CIT v. Lovely Exports 299 ITR 268 (SC), NRA Iron & Steel Pvt. Ltd. v. PCIT 412 ITR 161 (SC) etc.
If the AO has accepted the share capital as genuine, he cannot treat the share premium as bogus as it is a composite transaction and from the same source. It means the AO is treating the premium as excessive or unjustified which he is not entitled to do. He cannot question the commercial expediency of the premium.
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