TaxTMI 
TaxTMI 
2026 (8) TMI 954
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....g details of parties to whom share capital is issued and share valuation report for the purpose of section 56(2)(viib) of the Act. On 22.02.2022 the Appellant filed response providing details of the non-resident investor in the given format and confirmation from such investor. The Appellant also explained since the investment was made by non-resident shareholder provision of section 56(2)(viib) shall not apply. On 21.07.2023 the ld. AO issued questionnaire u/s 142(1) asking to establish creditworthiness of the investor and seeking the details of the investor such as ITR, B/S & P/L, bank statement, correspondence copies. details of directors, nature of business of investor. and net worth of the investor and vide reply dated 03.08.2023 the Appellant furnished the response giving all details as asked by the AO to establish the creditworthiness of the investor, which inter alia included name, address of investor, nature of business of the investor, net worth of the investor both in INR/Thai Baht, financial statement of the investor, copy of ITR of the investor, bank outward remittance details and correspondence exchanged between the company and the investor. On 23.11.2023 the ld. ld. A....
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....e Act had no application on the facts of case as the Ld. AO as proper and complete enquiries in respect of issuance of share capital being carried out in the original assessment proceeding. 2.4 Not appreciating that recourse to revisional powers under section 263 cannot be exercised in a case where the transaction has been examined and accepted by the revenue in the previous assessment year, such an approach is against the principle of consistency, 2.5 Not appreciating that the concluded assessment proceedings cannot disturbed merely on the change of opinion of the Ld. PCIT on the issue which is already examined and decided by the Ld. AO in the course of assessment proceedings. Incorrect invocation of Section 68 of the Act on the share capital and share premium 3. On the facts and circumstances of the case & in law, the Ld. PCIT erred in alleging that the entire share capital & premium of INR 92,99,99,910 as unexplained cash credit under section 68 r.w.s.115BBE of the Act, in doing so grossly erred in: 3.1 Not appreciating that the Appellant has duly discharged its onus under section 68 of the Act by establishing identity, genuineness an....
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....of the transaction, genuineness and creditworthiness of this shareholder in respect of earlier tranches of share capital had already been examined in AY 2018-19 & AY 2017-18. The Delhi High Court in CIT v. Escorts Ltd. [2011] 9 taxmann.com 222 (Delhi) has categorically held that where the assessee has been consistently engaged in similar transactions inearlier years and the Revenue has accepted a particular view, the Commissioner "could have had no occasion to take recourse to revisional powers under section 263 of the Act on the fundamental aspects of the transactions in issue on which a view had been taken and, not shown to us as having been challenged". 7. Admittedly the assessment was completed under section 143(3) of the Act after issuance of detailed queries duly responded. Factually, during the course of assessment the Appellant duly submitted that the investor, Makro ROH, is the immediate parent company of the Appellant. The Appellant also placed on record Thai corporate registration details, director information, and income-tax returns of Makro ROH. To establish the genuineness of the share capital transaction, the Appellant has furnished, Audited financial statements o....
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....law, resulting in a loss of revenue, such order cannot be treated as "erroneous" merely because the Commissioner does not agree with that view, unless the view taken by the AO is unsustainable in law.In the case in hand as we appreciate the impugned order and findings of ld. PCIT, we find no word of discussion to show how the evidences filed by the assessee were not relevant or inadmissible in law to arrive at conclusion that transaction was genuine. 9. Addressing contention of ld. DR that assessment order is silent on enquires and resultant findings, we are of considered that on its own this cannot lead to inference that no enquiry was made. In this regard we are of considered view that the sufficiency or absence of AO's enquiry must be ascertained from the assessment records as a whole, not merely from the written order. 9.1 Then settled legal position is that the existence and adequacy of enquiry must be determined from the entire assessment record and surrounding circumstances, and not solely from the face of the assessment order. Reliance in this regard is placed on the decision of Hon'ble Delhi High Court in case of CIT v Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del)) ....
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....onsiders such enquiry to be insufficient and not exhaustive, without adding further to the issue by his own enquiry or factual assertions from the material on record in assessment record that the conclusion of acceptance of transaction as genuine was not sustainable in law.Therefore, if the ld. PCIT intended to hold that there is any error in the order of the Assessing Officer, which can be corrected by further enquiry then ld. PCIT should give a categorical finding by his own enquiries and investigations, howsoever, minimal be that. Hon'ble Delhi High Court in the case of PCIT Vs. Delhi Airport Metro Express Private Limited vide ITA No.705/2017 order dated 05.09.2017 has held that for the purpose of exercising jurisdiction u./s. 263 of the Act, the conclusion that the order of the AO is erroneous and prejudicial to the interest of the revenue has to be preceded by some minimal inquiry. If the PCIT is of the view that the AO did not undertake any inquiry, it becomes incumbent on the PCIT to conduct such inquiry. If he does not conduct such basic exercise then the PCIT is not justified in setting aside the order u/s. 263 of the Act. Reliance for this can also be placed on the Hon'bl....