SUNRISE ACADEMY VS I. T DEPT.
WA. NO. 1297 of 2018 IN WPC. 3485/2018
12-07-2018

S. 56(2)(viib) vs. s. 68: Any premium received by a Company, in which the public does not have substantial interest, on sale of shares, in excess of its face value, can be treated as income from other sources u/s 56(2) (viib). This is not controlled by s. 68 which provides that if the assessee does not provide a satisfactory explanation for the credit, the amount can be assessed as income. If S. 68 is applicable, and the proviso is not satisfied, then the entire amounts credited to the books would be treated as income. If satisfactory explanation is offered as to the source, then the premium paid as revealed from the books will be brought to tax as income from other sources.