Applicability of provisions of section 28(iv) read with section 2(24)(ix) of the IT Act


Quick Summary
This Income Tax Appellate Tribunal ruling concerns money received by a company for issuing shares, which could not be issued due to contravention of FEMA guidelines. The revenue treated this money as a gift and therefore taxable income. However, the Tribunal found that the initial intention was for share capital and the revenue had not doubted this. Despite the failure to allot shares within the stipulated time due to FEMA regulations, the Tribunal ruled that the sum received could not be taxed as income in the hands of the assessee company, allowing the appeal.

Court :
ITAT Mumbai

Brief :
This appeal in ITA No.559/Mum/2017 for A.Y.2012-13 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-12, Mumbai in appeal No.CIT(A)-12/ACIT-6(2)(2)/217/15-16 dated 03/11/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961.

Citation :
ITA No.559/Mum/2017

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