#share capital

ITAT Delhi rules that share capital received from a non-resident holding company cannot be taxed under Section 68 of the Income Tax Act if the assessee establishes the investor's identity, creditworthiness, and the transaction's genuineness through bank records and FIRC. This sets a precedent for protecting foreign investments from arbitrary additions where documentation is robust.

The ITAT Kolkata has ruled that when taxpayers submit credible documentary evidence establishing the identity, creditworthiness, and genuineness of share subscribers, non-compliance with summonses under Section 131 cannot justify treating share capital as unexplained cash credit. This clarifies that procedural lapses cannot override substantive proof, offering critical relief to companies relying on legitimate equity infusions.

ITAT Delhi ruled that share premium received from investors cannot be taxed as undisclosed income under Section 68 if the assessee establishes investor identity, creditworthiness, and genuineness of transactions. The tribunal deleted a Rs. 45 lakh addition, reinforcing that valuation methods like Net Asset Value (Rule 11UA) suffice when documentation is uncontroverted.