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of <h1>Tribunal partially allows appeal, emphasizing importance of documentary evidence in tax case.</h1> <h3>Movefast Automobiles Pvt. Ltd. Versus ITO Ward-1 (5), Faridabad</h3> Movefast Automobiles Pvt. Ltd. Versus ITO Ward-1 (5), Faridabad - TMI Issues Involved:1. Condonation of delay in filing the appeal.2. Addition of Rs. 85,00,000 under Section 68 of the IT Act.3. Enhancement of income by Rs. 70,83,500 under Section 56(2)(viib) on a protective basis.4. Validity of show cause notice under Section 250(2).5. Scope of limited scrutiny.6. Initiation of penalty proceedings under Section 271(1)(c).Summary:Condonation of Delay:The Tribunal condoned a 23-day delay in filing the appeal, accepting the assessee's reason that the delay was due to the counsel being occupied with tax audit work.Addition Under Section 68:The assessee contested the addition of Rs. 85,00,000 under Section 68 for unexplained share premium and share capital. The Tribunal found that the assessee had provided all necessary documentary evidence to establish the identity, creditworthiness of the investors, and genuineness of the transaction. The Tribunal noted that the Revenue Authorities failed to disprove the documents furnished by the assessee. Citing Supreme Court and High Court judgments, the Tribunal held that once the assessee discharges its burden, the onus shifts to the Revenue, which failed to provide contrary evidence. Consequently, the addition under Section 68 was deleted.Enhancement of Income Under Section 56(2)(viib):The Tribunal addressed the enhancement of income by Rs. 70,83,500 under Section 56(2)(viib) on a protective basis. The assessee argued that the CIT(A) erred in rejecting the valuation report prepared under the Discounted Cash Flow (DCF) Method as per Rule 11UA(2)(b) of the Income Tax Rules. The Tribunal agreed with the assessee, stating that the valuation report prepared by a Chartered Accountant should be accepted as per the prescribed method. The Tribunal emphasized that the Assessing Officer cannot substitute their own valuation in place of the one provided by the assessee. The enhancement made by CIT(A) was thus deleted.Validity of Show Cause Notice:The Tribunal did not find it necessary to adjudicate on the validity of the show cause notice under Section 250(2) since the main grounds were decided in favor of the assessee.Scope of Limited Scrutiny:The Tribunal noted that the case was selected for limited scrutiny to verify the source of share premium. The Tribunal found that the Revenue Authorities exceeded their jurisdiction by scrutinizing beyond the limited scope.Penalty Proceedings:The Tribunal did not address the initiation of penalty proceedings under Section 271(1)(c) as the main grounds were resolved in favor of the assessee.Conclusion:The appeal was partly allowed, with the Tribunal deleting the additions and enhancements made by the CIT(A). The Tribunal emphasized adherence to statutory procedures and the importance of documentary evidence in proving the genuineness of transactions.
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