19 October 2011
The company in question is a pvt ltd company. it has old share applicaiton money received from a pvt company (received in INR so no FEMA implication)
The investee co has confirmed the funds given towards share application
Can this share applicaiton money attract the income tax assessing officer for non-allotment. if yes, under which section?
please provide the supporting case law, if any available.
19 October 2011
THE SAME SITUATION AROSE IN CASE OF INDUS VALLEY PROMOTERS LTD. v. COMMISSIONER OF INCOME-TAX THE DELHI HIGH COURT CONFIRMED THAT YES, BUT AS PER SECTION 68 OF INCOME TAX ACT,1961 (CASH CREDITS)Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers NO EXPLANATION about the NATURE AND SOURCE thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, SATISFACTORY the sum so credited may be charged to income-tax as the income of the assessee of that previous year.
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