Section 68 is an inquiry section into the genuineness of sources of cash credits, which could be in the form of loan or capital introduced in the business.
Section 56(2)(viib) on the other hand call upon inquiry and verification of fair market value of any amount introduced as capital/ share premium in the business by any unlisted company.
In[2021] 92 ITR (Trib) 521 (ITAT[Jai]) the case of the taxpayer was selected for scrutiny by CASS under limited scrutiny for the reason that “Whether the funds received in the form of share premium are from disclosed sources and have been correctly offered to tax”. Later the Commissioner in exercise of his power u/s 263 rose-up to also demand examination into the applicability of section 56(2)(viib) and any other relevant section of the Act and also to make necessary additions to the total income or under section 115JB(1) of the Act, wherever required.
The Tribunal held thatsection 56(2)(viib) examination did not fall within the realm of the limited reasons for which the case was selected for scrutiny and furthermore unless the limited scrutiny was converted to full scrutiny there is no way can CIT allege it as a case of inadequate enquiry.
In this case the AO did gather sufficient evidence from the taxpayer in assessment to get his satisfaction on the nature and source of credits