Income Tax Officer, Ward 20(3), Delhi Vs. M/s. Quetzal Exim Pvt. Ltd.

Parties Involved

Facts Summary

The assessee company, M/s. Quetzal Exim Pvt. Ltd., filed its return of income on 17.10.2016 declaring a total income of Rs.90,780/-. The case was selected for limited scrutiny to verify investments and funds received as share premium from disclosed sources. Notices under Sections 143(2) and 142(1) of the Income Tax Act, 1961, were issued, and the assessee responded electronically. The Assessing Officer (AO) assessed the income at Rs.14,26,38,780/- and made an addition of Rs.14,25,48,000/- under Section 56(viib) of the Act. The assessee appealed this order before the Commissioner of Income Tax (Appeals)-7, Delhi, which was allowed on 08.11.2019. The Department of Revenue then filed the present appeal against the order of the CIT(A).…

Legal Issues

• 1. Whether the Learned Commissioner of Income Tax (Appeals) erred in deleting the addition under Section 56(2) of the Income Tax Act, 1961 of Rs.14,25,48,000/- on account of share allotment in excess of fair market value as determined under Rule 11UA(2) of the Income Tax Rules, 1962.

Judgment Outcome

Decided in favour of Revenue.

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