ITAT Upholds disallowance u/s 56(2)(viib) due to Unexplained Share Premium Fluctuation within same Financial Year

The ITAT has upheld the disallowance of share premium under Section 56(2)(viib) of the Income Tax Act due to unexplained fluctuations in share premium within the same financial year. The case involved a company that issued shares at a premium, but the fluctuations in the share premium were not satisfactorily explained by the company. The ITAT ruled that such unexplained variations in share premium raise doubts about the genuineness of the transaction, and therefore, the disallowance of the share premium under Section 56(2)(viib) was justified. This ruling underscores the importance of maintaining transparency and proper documentation in share transactions.