TaxTMI 
TaxTMI 
2020 (4) TMI 845
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....GOVERNMENT OF INDIA MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, OFFICE OF THE PR. COMMISSIONER OF INCOME TAX, HSIIDC BUILDING, VANIJYA NIKUNJ, UDYOG VIHAR, PHASE PHASE-V, GURGAON F No. PCIT/GGN/TECH/263/78/2018-19/5391 Dated 29.11.2018 To, The Principal Officer, M/s. Sunray Cotspin Pvt. Ltd., Plot No.116, Udyog Vihar, Phase Phase-IV, Sir/ Madam Subject: Notice u/s 263 in case of M/s. Sunray Cotspin Pvt. Ltd. (PAN-AAPCS 2728 D) for A.Y. 2014-15 - Reg - The assessment in this case was completed u/s 147/143(3) of the I.T. Act vide order dated 18.08.2016 by the then Assessing Officer declaring a returned income of Rs. 12,350/- 2. The assessment records of the above noted assesse for the A.Y. 2014-15 were examined. On examination of the assessment records, following discrepancies are noticed. On the basis of discrepancies, it is observed that the assessment framed by the AO u/s 143(3) is erroneous and pre-judicial to the interest of revenue due to following reasons: 3. During the year under consideration, company had issued 1833300/- shares @ Rs. 30/- to various individual against the face value of Rs. 10/- and has received share premium of Rs. 3,66,66,000/-. O....
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....sessment order by observing as under: "In view of the above facts and circumstances of the case, I am of the confirmed view that the A C), by not pursued the inquiries to their logical end has made the order erroneous and prejudicial to the interest of revenue. Hence the same deserves to be revised u/s 263 of I.T. Act, 1961. Therefore, the said order passed by the Assessing Officer is set aside on this particular issue only. The assessing officer is directed to pass fresh assessment order after making thorough and detailed inquiries-on this particular issue only. The assessing officer should pass a speaking order after providing adequate opportunity to the assessee." 6. Before us, the ld. counsel for the assessee pointed out that the PCIT has grossly erred in not understanding the facts in its true perspective. It is the say of the ld. counsel for the assessee that during the F.Y. 2012-13, relevant to Assessment Year 2013-14, share application money was Rs. 5,46,80,000/- and share capital was Rs. 1 lakh and there was negative reserve and surplus of Rs. 1,06,177/- and effective increase in the share capital of Rs. 3,19,000/- and not the amount taken by the ld. PCIT. 7. The ld. c....
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....10. It can be seen from the above that the share application money of Rs. 5,46,80,000/- was taken in Assessment Year 2013-14 and not in the year under consideration. Reserve and surplus account is as under: NOTE To the financial statements for the year ended 31st March 2014 (Contd.) (All Amounts in Rs., Unless otherwise stated) 4) RESERVES AND SURPLUS As at 31st March, 2012 Additions Deductions As at 31st March, 2013 Additions Deductions As at 31st March, 2014 Capital Reserve 0 0 0 0 0 0 0 Capital 0 0 0 0 0 0 0 Redemption Reserve Securities 0 0 0 0 36666000 0 36666000 Premium Account Other Reserve Capital Subsidy 0 0 0 0 0 0 0 Investment 0 0 0 0 0 0 0 Allowance Reserve General Reserve 0 0 0 0 0 0 0 Surplus in Stmnt ....
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....crutiny, the Assessing Officer cannot go beyond the issue and from the notice u/s 142(1) of the Act exhibited elsewhere, it can be seen that the Assessing Officer made specific query in relation to details of share premium. 13. The assessee had furnished complete details in respect of share application money received and the same is placed at pages 34 to 36 of the paper book which read as under: SUNRAY COTSPIN PRIVATE LIMITED DETAIL OF SHARE APPLICATION MONEY RECEIVED AJAY GOYAL DATE AMOUNT 06.08.2011 1200000 10.08.2011 700000 14.11.2011 640000 16.11.2011 5000 08.12.2011 65000 2610000 GIRDHARI LAL MODI DATE AMOUNT 25.08.2011 700000 Less: Refund 06.01.2014 -1000 699000 NARAYANI DEVI GOYAL DATE AMOUNT 04.08.2011 1300000 10.08.2011 700000 23.08.2011 800000 24. 09.2011 1000000 27.12.2013 1000 3801000 PHULA DEVI MODI DATE AMOUNT 24.09.2011 1000000 10.12.2011 500000 1500000 RAMESH MODI DATE AMOUNT .08.2011 3200000 24.09.2011 600000 10.12.2011 204000 27.12.2013 46000 4050000 SANJAY GOYAL....
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....y Rs. 53 lakhs has been accounted for during the year under consideration. The share application money has been received from very same persons from whom share application and share premium amount has been received in earlier years. No adverse inference has been drawn in earlier years in respect of money received from the very same persons. During the year also, in the course of assessment proceedings, the assessee has furnished copy of bank statements in respect of all allottees alongwith their tax returns details. 15. We also find that during the course of scrutiny assessment proceedings, the assessee has furnished a certificate from the CA justifying the valuation of shares and the certificate is placed at pages 168 to 170 of the paper book. This clearly shows that the Assessing Officer has examined the share premium received during the year which is supported by the fact that the return was selected for scrutiny assessment only for this limited purpose. 16. The following observations of the PCIT appear to be misplaced: "I have considered the various case laws quoted by the ld. counsel for the assessee. It is found that the contents/facts of the case laws are not exactly rel....
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....nt contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Our view is fortified by the decision of Hon'ble High Court of Bombay in the case of CIT vs. Nirav Modi, [2016] 71 Taxmann.com 272 (Bombay)". 20. The Hon'ble Bombay High Court in the case of CIT vs. Gabriel India Ltd. 203 ITR 108 has held that: "the decision of the ITO cannot be held to be erroneous simply because in his order he did not made an elaborate discussion in this regard.......". 21. The Hon'ble Gujarat High Court in the case of Micro Inks Ltd. 85 Taxmann.com 310 has held that: "If the Assessing Officer has adopted a view which is a plausible on....