TaxTMI 
TaxTMI 
2024 (10) TMI 648
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....special services, baggage services & cargo transfers. For the assessment year 2015-16, the assessee filed the return of income on 30/11/2015 admitting total income of Rs. 2.99 crores after claiming deduction under section 80-IA of the Income Tax Act, 1961 (the Act) amounting to Rs. 7.46 crores as per the normal provisions of the Act and declaring book profits amounting to Rs. 9.05 crores under Section 115JB of the Act. According to the assessee, during the course of assessment proceedings, various details and information were called for, which were duly submitted by the assessee from time to time. Assessment was concluded by an order dated 12/12/2017 under section 143(3) of the Act with the adjustment of Rs. 7.46 crores disallowing the claim of deduction under section 80-IA of the Act. Assessee had preferred an appeal before learned CIT(A) and it was decided in favor of the Assessee. Revenue preferred an appeal before the Tribunal and the same is pending. 3. Subsequently, on a perusal of the assessment record, learned Principal Commissioner of Income Tax found that during the year, as a part of restructuring of the existing capital structure and pursuant to the Scheme of Capital R....
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....ing his mind upon the relevant documents had completed the assessment vide order dated 12/12/2017. 6. He further submitted that a detailed enquiry and examination with respect to the issue under consideration was undertaken by the learned Assessing Officer in the course of assessment as well as reassessment proceedings, even if one were to say that such enquiry was inadequate, the same cannot be a ground for proceedings under Section 263 of the Act. By placing reliance on the decisions reported in CIT v. Sunbeam Auto Ltd. [2011] 332 ITR 167 (Delhi HC), Spectra Shares and Scrips Pvt. Ltd vs. CIT (354 ITR 35) (AP HC) and Indu Fine Lands (P.) Ltd (45 taxmann.com 307) - ITAT, Hyderabad he submitted that there is a distinction between 'lack of enquiry' and 'inadequate enquiry'. It is only in cases of 'lack of inquiry' that such a course of action under section 263 would be open. 7. On this score, he submitted that the assessment order cannot be held to be erroneous and prejudicial to the interests of the Revenue on this issue, because all the relevant enquiries in connection with the capital reduction was done by the learned Assessing Officer during the course of assessment pr....
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....tice dated 04/03/2020 opined that the learned Assessing Officer failed to examine the gain of Rs. 24,72,45,262/- under section 56(2)(viia) of the Act, seems to have accepted the contention of the assessee that section 56(2)(viia)(ii) of the Act has no application to the case of the assessee, where the company reduced the share capital by way of reducing the face value of the shares, and proceeded to pass the impugned order stating that the capital gain should be brough to tax under section 56(i) of the Act. Learned AR submitted that a reading of section 56, shows that where the legislature intended to tax the capital transactions, the same have been specifically included under specific clauses of section 56(2) of the Act, lest the same cannot be brought to tax under the residuary head of section 56(1) of the Act, and therefore, unless a receipt is a revenue receipt, it cannot be in the nature of income and unless it is in nature of income, it cannot be considered for taxation under section 56(1) of the Act. 11. Per contra, it is the argument of the learned DR, that there is transfer of shares by reducing the share capital and paid off the value of shares to AEs by the assessee and....
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....tion under section 80(A)(i)(b) of the Act and copy of valuation report for the valuation of preference shares issued by the assessee. So also, vide letter dated 19/10/2016, the assessee furnished Annual Report inclusive of P&L, Balance Sheet with Schedules, Tax Audit Reports including Forms 3CEB & 29B, Income Tax Return and Explanation to the items (a) to (g) of Point 6 along with copies of Form 15CA, High Court Order & Share Subscription Agreement, etc. It is only after obtaining all this material, the learned Assessing Officer completed the assessment by order dated 12/12/2017. There is sufficient material to reach a conclusion that the learned Assessing Officer applied his mind to the issue in question by seeking the assesses to furnish relevant material and only after obtaining the same, he completed the assessment. It is therefore, clear that merely because there is no elaborate discussion in the assessment order on this aspect cannot be a ground to conclude that the learned Assessing Officer concluded the assessment by omitting any particular aspect, when there was an enquiry on that aspect by seeking material, not once, but twice and obtaining the relevant requisite informat....
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....PS should have been brought to tax under section 56(1) of the Act. First objection of the assessee to this observation of the learned Principal Commissioner of Income Tax is that the learned Principal Commissioner of Income Tax did not bridge the gap between "if the DCF method is wrong.... ...." and a clear finding that the "DCF method adopted by the assessee is wrong....." for any reasons. Merely labouring under hypothetical possibility of DCF method adopted by the assessee going on, learned Principal Commissioner of Income Tax concluded that the assessment order is erroneous and prejudicial to the interest of Revenue. On a careful reading of the impugned order, we find it to be so. 17. Learned Principal Commissioner of Income Tax seems to have accepted the contention of the assessee that in the cases of buyback of its own shares by a company, even if lesser price was paid to the shareholders, section 56(2)(viia) of the Act has no application. Learned Principal Commissioner of Income Tax however did not state in the impugned order as to how in such situation, 56(1) of the Act will be applicable. In the case of CIT vs. M/s. Crescent Investment Co. (1995) 216 ITR 100 (SC) the Hon&#....