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2022 (7) TMI 991 - AT - Income TaxRevision u/s 263 - Addition u/s 56(2)(viib) for the excess share issue price received by the assessee and assessed the loss - as per CIT- A AO has not carried out the detailed investigation/verification /independent inquiry regarding identity, creditworthiness of the shareholders and the genuineness of the transactions of receiving share capital - HELD THAT:- In the light of the provisions of section 263 and a settled position of law, powers u/s 263 can be exercised by the Pr. Commissioner/Commissioner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and also prejudicial to the interest of the Revenue. By 'erroneous' is meant 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. In the present case Assessing Officer observed that the fair market value determined by the Chartered Accountant is Rs.90.34 whereas the assessee issued for a price of Rs.91/- each. The excess amount charged by the assessee-company was added by the Assessing Officer by invoking the provisions of section 56(2)(viib). We come to the conclusion that the transaction of issuing 76923 equity shares at Rs.91/- per share (face value of Rs.10/- and share premium of Rs.81/-) issued by the assesseecompany to the two shareholder companies namely Zigzag Vanijya Private Limited (43,956 equity shares) and Ganadipati Estate Private Limited (32,967 equity shares) has been examined in detail by the Assessing Officer and an addition was made on this issue. It is neither a case of “no enquiry” or “lack of enquiry”. In our considered view, the Assessing Officer has conducted sufficient inquiry by calling all necessary details and information and accepted the genuineness of the said transactions after being satisfied with the identity, creditworthiness and genuineness of the shareholders and examining fair market value of the equity shares issued. Under these given facts and circumstances wherein neither the order of the Assessing Officer is erroneous nor it is prejudicial to the interest of the revenue, there remains no scope for ld. PCIT to invoke the provision of section 263 of the Act. - Appeal of assessee allowed.
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