TaxTMI 
TaxTMI 
2018 (12) TMI 1886
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....ffective grounds: - "1. The Order of the learned Principal Commissioner of Income-Tax-8, ('the Hon'ble Pr. CII') dated 5 Jan 2018, Mumbai passed under section 263 of the Income tax Act, 1961 ('the Act') in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant's case. 2. The learned Assessing Officer has passed an order in favour of Appellant after verifying various evidences a facts produced before him without appreciating that there is no error, much less an error, prejudicial to the interests of the Revenue to warrant a revision u/s 263 and therefore the order passed by the Hon'ble Pr. CIT is ultra vires the provisions of Section 263 and requires to be cancelled under the facts and circumstances of the Appellant's case. 3. The Hon'ble Pr. CIT failed to appreciate the facts that the Appellant had filed the details of creditworthiness, identity and genuineness of Secunderabad Healthcare Ltd, the investor vide letter dated 21.03.2016 and where duly verified and accepted by the Learned AO during the course of scrutiny assessment. 4. The Hon'....
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....riefly stated facts are that original assessment was completed under section 143(3) of the Act by ITO-ward-8(3)(1), Mumbai vide order dated 22.03.2016 for the AY 2013-14 relevant to FY 2012-13. The relevant assessment order is reproduced as under: - "..... The assessee has e-filed its return of income on 30.09.2013 declaring total income at Rs. 21,17,860/-. The return was processed under section 143(1) at Rs. 21,17,860/-. The case was selected for scrutiny under CASS. Subsequently, statutory notices under section 143(2) and 142(1) of the I.T. Act were issued on 03.09.2014 and 31.07.2015, 16.11.2015 respectively and duly served upon the assessee. 2. In response to the statutory notices issued, Shri Manish R. Saiya, Income Tax Practitioner and Authorized Representative (AR) of the assessee attended and submitted the details called for. The details filed have been verified and kept on record after test check. The case is discussed with him. 3. The assessee is company engaged in Trading of Textiles, Fabrics and suit pieces. 4. Subject to the above remarks, the total income of the assessee company is compared as under: - Total income as per Return of income :  ....
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....lance call money received in the year under consideration i.e. AY 2013-14 from Secunderabad Healthcare Ltd. is as under: - AY Nature Capital per share in Rs. Premium Per share in Rs. Number of shares Capital in Rs. Premium in Rs. 2012-13 Share allotted & partly paid 2 98 140,000 280,000 13,720,000 2013-14 Balance Call money card 8 392 130,000 1,120,000 54,880,000 10 490 280000 1400,000 68,600,000 6. According to him, the AO accepted the creditworthiness, identity and genuineness of transaction after considering the details filed before AO by the assessee vide letter dated 21.03.2016. The assessee explained that share capital is explained vide letter dated 26.12.2017 again before PCIT and the relevant Para 7 to 10 reads as under: - "7. The appellant submits, as per the provisions of section 68 of the Act, where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any share capital and the nature and source of such amount credited, is not explained then the said amount is to be treated as cash credit under section 68. However, in the case of the a....
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....ntral Government in this behalf. As per the provision of section 56(2)(viib) of the Act, where a closely held company issues its shares in a previous year at a price which is more than its fair market value then the amount received in excess of fair market value of shares will be charged to tax in the hand of the company u/s 56(2)(viib) of the Act as income from other sources. The clause (viib) of sub section (2) of section 56 was inserted vide finance Act, 2013 w.e.f 01.04.2013 and applicable for A. Y. 2013-14 and subsequent years on issue of share which is more than its fair market value. The assessee had issued the share in previous year AY 2012-13 and not in AY 2013-14. Hence, the reason mentioned in your Honor's notice that the share were not issue on the basis of fair market value of the shares determined in accordance with the prescribed method is not valid reason to cancel the assessment order or revision u1s263. As such, the order passed by the Ld. AO is not erroneous and more so, not prejudicial to the interest of the revenue. The Assessee submits that shareholder company Secunderabad Healthcare Ltd is active Company and still in existence, which is based xzon th....
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....objections to reasons for reopening dated 15.04 18 86-92 17 AO's Rejection of Appellant's Objections to Notice u/s-148 dt.14.06.18 93-98 9. The learned Counsel for the assessee stated that the share application money and share premium was explained in AY 2012-13 and the entire details were before the AO in AY 2012-13. According to him, even during the course of assessment proceedings for AY 20130-14 i.e. the order under consideration, the assessee filed explanation regarding transactions with respect to receipts of Secunderabad Healthcare Ltd. The learned Counsel for the assessee relied on the Tribunals order, Ahmedabad Bench in the case of Torrent Pharmaceuticals Ltd. vs. DCIT in ITA No. 164/Ahd/2018 vide order dated 2014-15 and M/s Indus Best Hospitality & Realtors Pvt. Ltd. vs. PR CIT-6 in ITA No. 3125/Mum/2017 vide order dated 19.01.2018, wherein Para 9.5 in the case of Torrent Pharmaceuticals (supra) read as under: - "9.5 We thus find merit in the plea of the assessee that the Revisional Commissioner is expected show that the view taken by the AO is wholly unsustainable in law before embarking upon exercise of revisionary powers. The revisional powers cannot be ....
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....mental Representative relied on the following 24 case laws: - "1. ITO vs. Spartacus Farms P Ltd (2018) 91 Taxmann.com 15 (Mumbai-Trib.) 2. Royal Rich Developers Vs. DCIT 3. ITO Vs. Blessings Commercial P Ltd. (2018) 91 taxmann.com 176 (Kolkata-Trib.) 4. Ankit Agrochem Vs. JCIT (2018) 89 taxmann.com 45 (Rajasthan) 5. Konark Structural Engineering P. Ltd. Vs. DCIT (2018) 90 taxmann.com (Bombay). 6. Prem Castings Vs. CIT (2017) 88 taxmann.com189 (Allahabad) 7. Kottenz India Manufacturing P. Ltd Vs. DCIT (2018) 95taxmann.com291 (Gujarat) 8. Aradhna Estate P. Ltd. Vs. DCIT (2018)95taxmann.com241(Gujarat) 9. MSK Real Estate vs. DCIT (2018)95 taxmann.com241(Gujarat). 10. Aishwarya Dying Mills P. Ltd Vs. DCIT (2018) 94 taxmann.com430 (Gujarat) 11. Khatu Shyam Processors P Ltd vs. DCIT (2018) 94 taxmann.com429 (Gujarat) 12. Pr. CIT vs. Best Infrastructures (2018) 94 taxmann.com115(SC) 13. Pratik Syntex Vs. ITO (2018)94 taxmann.com12 (Mumbai-Trib) 14. DRB Exports Vs. CIT (2018)93taxmanncom490 (Calcutta) 15. Honey Consultancy Services P. Ltd. Vs. DCIT (2013) 37taxmann.com441 (Mumbai-Trib.) 16. CIT vs. Rathi Finlease Ltd. (2018) 215 CTR MP 429 (MP High Co....
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.....e. Rs. 5,48,80,000/-. It means that the assessee has issued these equity shares in the AY 2012-13 and not the relevant AY 2013-14. Only part payment on account of share premium and face value of share is received in this year i.e. AY 2013-14. 12. In view of the above facts, we find that the assessee has filed complete details of all share holders of the company with full name and address of all share holders along with details of PAN. Even while completing assessment for AY 2012-13, all these details were filed before the AO regarding allotment of 1.40 lakhs shares at a premium to Secunderabad Healthcare Ltd. and all details resolution copies, bank statements, payment of call money letters and PAN Card Xerox were filed. 13. In view of the above facts and circumstances, we are of the view that in the given facts of the present case the issue is covered on merits by Hon'ble Bombay High Court in the case of CIT vs. Orchid Industries Pvt. Ltd. (2017) 397 ITR 136 (Bom.) wherein honorable High court has considered the decision of division Bench of Bombay High Court in the case of CIT vs. Gagandeep Infrastructure P. Ltd (2017) 394 ITR 680 (Bom) & Hon'ble Supreme Court in the case of CI....