PCIT VS. CHAIN HOUSE INTERNATIONAL (P) LTD (SUPREME COURT)
S L P (CIVIL) DIARY NO(S). 1992/2019
05-04-2019
S. 68 Bogus Share Premium: No reason to interfere. SLP dismissed. High Court
held there is no limitation on the amount of premium that can be charged. The AO
cannot question the transaction merely because he thinks the investor could have
managed by paying a lesser amount as share premium. It is the prerogative of the
Board of Directors to decide the premium and it is the wisdom of the shareholder
whether they want to subscribe to shares at such a premium or not. S. 68 does
not apply as the funds were received through banking channels and the identity,
creditworthiness and genuineness of the investors was established.
