Shankar Traders & Distributors Pvt. Ltd. vs. Income Tax Officer, Ward-5(1)

Parties Involved

Facts Summary

Shankar Traders & Distributors Pvt. Ltd., a private limited company and a registered non-banking finance company (NBFC), engaged in providing loans, advances, and dealing in shares and securities, filed an appeal against the order of the Commissioner of Income Tax (Appeals) dated 27th December, 2023. The appeal arose from the assessment order under Section 143(3) read with section 144 of the Income-tax Act, 1961 dated 30th March, 2015. The assessee company had issued equity shares and received share capital and security premium. The Assessing Officer (AO) examined the financials and concluded that the assessee could not raise share capital with such huge share premium. The AO made additions under Section 68 of the Act at ₹2,30,00,000/- and minor addition under Section 14A of the Act at ₹1010. The assessee challenged the addition made under Section 68 of the Act before the Commissioner of Income Tax (Appeals) who confirmed the addition based on the principle of preponderance of probabilities. The assessee then appealed to the Income Tax Appellate Tribunal (ITAT) Kolkata.…

Legal Issues

• 1. Whether the addition made by the Assessing Officer under Section 68 of the Act is justified.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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