IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’, NEW DELHI Before Sh. Satbeer Singh Godara, Judicial Member ITA No. 8306/Del/2025 : Asstt. Year: 2015-16 ITA No. 8306/Del/2025 : Asstt. Year: 2015-16 ITA No. 8306/Del/2025 : Asstt. Year: 2015-16 ITA No. 8306/Del/2025 : Asstt. Year: 2015-16 ITA No. 8306/Del/2025 : Asstt. Year: 2015-16 ITA No. 8306/Del/2025 : Asstt. Year: 2015-16 Assessee by: Sh. Parikshit Aggarwal, CA Revenue by : Sh. Manoj Kumar, Sr. DR Date of Hearing: 20.01.2026 Date of Pronouncement: 20.01.2026

ORDER

This assessee’s appeal for Assessment Year 2015-16 arises against the Addl./JCIT(A), Kolkata’s DIN & order No. ITBA/APL/S/250/2025-26/1081746005(1) dated 14.10.2025, in proceedings u/s 144 of the Income Tax Act, 1961 (in short “the Act”).

2. Heard both the parties at length. Case file perused.

3. Coming to the assessee’s sole substantive issue challenging both the learned lower authorities respective findings making section 56(2)(viib) addition of alleged unjustifiable share premium amounting to Rs.30,98,800/-; made in assessment order dated 04.12.2017 and upheld to the extent of Rs.29,65,480/-, in the lower appellate discussion to this effect, reads as under:

5.4 Grounds of appeal no. 4 and 5 are against the addition on account of share premium received. Facts involved in the issue is that the appellant is a company in which public are not substantially interested and had raised share capital during the year. The appellant had issued 3,332 shares to another resident company named – M/s. Cogent E-Services Pvt. Ltd. The face value of each share was Rs.10/- but premium was determined at Rs.5,990/- per share. However, during the relevant year, the appellant received an amount of Rs.29,98,800/- being 3,332 shares issued at a cost of Rs.900/- per share which included Rs.10/- towards face value and Rs.890/- as premium. Since the appellant failed to file any details or explanation for issuing shares at such a high premium value, the assessing officer added an amount of Rs.30,98,800/- to total income as unexplained investment. The amount added included initial subscription of Rs.1,00,000/- being 10,000 shares subscribed by promoters at face value of Rs.10/-.

5.5 On the other hand, the appellant claimed that the shares were issued on the basis of Board resolution passed in the meeting of the company and that the shares were valued by a qualified chartered accountant as per Rule 11UA(2)(b) of the I.T. Rules, 1962. The high premium of Rs.5,990/- was determined on the basis of such valuation of shares. In view of the same, the assessing officer was not justified in making addition on this issue. In this regard, as already discussed above, the provisions of section 56(2)(viib) of the I.T. Act (prevalent during that year) is reproduced:

“where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares:

Provided that this clause shall not apply where the consideration for issue of shares is received—

(i) by a venture capital undertaking from a venture capital company or a venture capital fund; or (ii) by a company from a class or classes of persons as may be notified by the Central Government in this behalf.

Explanation.—For the purposes of this clause,—

(a) the fair market value of the shares shall be the value—

(i) as may be determined in accordance with such method as may be prescribed; or (ii) as may be substantiated by the company to the satisfaction of the Assessing Officer, based on the value, on the date of issue of shares, of its assets, including intangible assets being goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, whichever is higher;”

The company- M/s. Cogent E-Service