Reassessment Quashed: Delhi High Court Upholds Full Disclosure in Share Capital Case

Reassessment Quashed: Delhi High Court Upholds Full Disclosure in Share Capital Case

K.R. Pulp & Papers Ltd., a public company that manufactures kraft paper. The company filed its income tax return for the year 2009-10, where it disclosed an income of Rs. 1,95,97,146. An assessment order was passed under Section 143(3), where income was increased to Rs. 5,84,39,170 as a deduction under Section 80IA was disallowed. However, this was later allowed by CIT(A) and ITAT.

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Years later, when this case was reopened on March 26, 2016, the Income Tax Department claimed that Rs. 25.32 crore of share capital and premium was unexplained and the assessing officer passed a reassessment order, adding Rs. 25,32,35,000 to the income under Section 68. On receiving the order, the company filed an appeal to the Commissioner of Income Tax (Appeals) [CIT(A)].