2024 (6) TMI 597

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....' in short] dated 27.03.2019 passed under Section 263 of the Income Tax, 1961 ('the Act' in short) whereby the assessment order passed by the Assessing Officer (AO) dated 21.12.2017 under Section 143(3) of the Act concerning A.Y. 2015-16 was sought to be set aside for reframing the assessment order in terms of supervisory directions. 2. As per its grounds of appeal, the assessee has challenged the revisional action of the Pr.CIT whereby the AO was directed to pass the assessment order de novo after conducting proper inquiries on the points set out in paragraph 4.2 of the revisional order. As per paragraph 4.2 of the order passed under Section 263 of the Act, the Pr.CIT has alleged that the AO has passed the assessment order without exami....

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....December, 2017 at an income of Rs. 1,12,25,930/-. During the year, the assessee has allotted 1,46,000 equity shares of Rs. 10/- each, @ Rs. 50/- per share. During assessment proceedings, the company vide its submission dated 20.12.2017 furnished detailed working of assets & liabilities as on/no. of 20.01.2015, wherein FMV of shares was drawn at Rs. 48.75. 2. The method for determining fair market value has been prescribed in Rule 11U and 11UA of the Income Tax Rules 1962. As per Rule 11UA, for computing the Fair Market Value, total book value of assets and liabilities in the Balance Sheet has to be taken. Further, as per Rule 11U, the Balance Sheet in relation to any company means balance-sheet as drawn up on the valuation date whi....

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....36/- as against Rs. 48.75/- as on 20.01.2015. 2.4 In view of the above, the order passed by the AO on 21.12.2017 u/s 143(3) of the Act is erroneous in so far as it is prejudicial to the interest of the revenue, causing loss of Rs. 20,44,000/- 3. For the above purpose, your case is fixed for hearing before the undersigned on 12.02.2019 at 02:30 pm. You may appear either in person or through your authorized representative at my office to show cause in writing as to why the assessment order passed u/s. 143(3) dated 21.12.2017 not be set aside u/s. 263 of the IT Act, 1961 on the lines indicted above. In case, no response to this show cause notice is received by the said date, it will be construed that you have no objection to ....

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.... in the books of the assessee-company and the assessee only received a meager sum of Rs. 4,35,000/- against such allotment of shares from one shareholder for allotment of 8700 equity shares. All the allotments to either existing shareholders or to other shareholders were issued at the same price of Rs. 50 per share. The ld. counsel submitted that the shares having been issued mainly to the existing shareholders, the deeming fiction of Section 56(2)(viib) does not apply at the first instance as the purpose for which the deeming fiction was created is not achieved. The ld. counsel thus submitted that neither assessment order is erroneous nor prejudicial to the interest of the revenue on such factual matrix. 9. The ld. DR for the Revenue, o....