ITA No 208 of 2023 Varsity Education Management P Ltd

Parties Involved

Facts Summary

The assessee, Varsity Education Management (P) Ltd, filed its return of income for the Assessment Year 2011-12 on 5/3/2013 declaring a loss of Rs.1,03,05,708/-. The case was selected for scrutiny under CASS to verify share premium. The Assessing Officer noticed that the assessee had allotted 12,01,923 Compulsory Convertible Preference Shares (CCPS) to M/s. NSR PR Mauritius LLC at a premium of Rs.1030/- per share, receiving a total share premium of Rs.123,79,80,690/-. The Assessing Officer accepted the share capital as genuine but treated the excess premium as unexplained cash credits and added it under section 68 of the I.T. Act, 1961. The assessee appealed to the Commissioner of Income Tax (Appeals) who deleted the addition made by the Assessing Officer. The Revenue appealed to the Tribunal, which reversed the order of the Commissioner of Income Tax (Appeals) and sustained the addition made towards share premium. The assessee further appealed to the Bombay High Court, which admitted the appeal. The Assessing Officer levied a penalty under section 271(1)(c) of the I.T. Act, 1961 for furnishing inaccurate particulars of income, which the assessee challenged before the Commissioner of Income Tax (Appeals) who deleted the penalty. The Revenue appealed to the Tribunal against this order.…

Legal Issues

• 1. Whether the learned CIT (A) erred both in law and on facts of the case in granting relief to the assessee.
• 2. Whether the learned CIT (A) is correct in deleting the penalty u/s 271(1)(c) of the Act, levied by the Assessing Officer.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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