| Question And Answer | |
|---|---|
| Subject: | Share Premium |
| Category: | Income-Tax |
| Querist: | Ruchi Bhansali |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | cash credits, sale of shares, Share premium |
| Date: | June 8, 2022 |
Assessee is a private limited company engaged in the business of construction. In the FY 2012-13, assessee company has issued 3,00,000 shares of Rs. 10/- each to various parties at a premium of Rs. 90/- per share and accordingly collected Rs. 30,00,000/- for share capital and Rs. 2,70,00,000/- on account of share premium.
During the course of assessment proceedings, AO asked the details about issue of these shares to various companies at a premium and justify the genuineness of the transaction.
The assessee company could not produce the evidence in support of the same. Therefore, the AO made the addition of Rs. 3,00,00,000/- in the hands of the company as unexplained cash credit.
CIT(A) and Hon’ble ITAT also confirmed the said addition made by the AO. The assessee company filed an appeal before the Hon’ble High Court. Later on the assessee company has opted for Vivad se Vishwas Scheme and the PCIT has also issued Form 5. Since the assessee company has complied with all the conditions and paid the taxes due as per DTVSV Act.
Issues:
- Can assessee company now transfer the shares which were in the name of different people to the name of the main promotor shareholders of the company in their share holding ratio?
- Is there any further tax implication of this transaction and transfer of shares in the hands of the company as well as promotor share holder?
The assessee has only settled the issue of unexplained share premium under the Vivad se Vishwas Scheme. Any transfer of shares will be a new transaction which will attract Capital Gains.