Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 581 - AT - Income TaxAddition an account of investment in share u/s 69 - HELD THAT:- The investment of Rs. 50 lakhs by way of share application money is out of deposits by the assessee in API Industries Private Limited made in earlier year (i.e. financial year 2011-12) by way of account payee cheque, and therefore addition, if any, can be only made in financial year 2011- 12. It was only out of this deposit made by the assessee in the immediately previous financial year(financial year 2011-12), that the shares were issued by API industries Private Limited to the assessee. Accordingly, the source of Rs. 50 lakhs has been fully explained by the assessee. The counsel for the assessee submitted that all these facts were submitted before CIT(Appeals), however, the same omitted to be considered in the appellate order. In response, the Ld. DR drew our attention and submitted that the cheque was “received” by API industries Ltd, however, whether the same was credited/encashed in financial year 2011-12 is yet to be verified. Therefore, it cannot be concluded that a transaction in question pertains to financial year 2011-12, and not the impugned assessment year under consideration. Addition u/s 56 of the Act as per Rule 11UA of the Income Tax Rules - HELD THAT:- Assessee has submitted that the source of investment of Rs. 50 lakhs in the shares of API industries Ltd stands fully explained since such allotment was made out of deposits held with the said company from the previous year. Further, all transactions were made by way of account payee cheques, and hence there is no doubt about the genuineness of the same. We also observe that the assessee had submitted that the Ld. CIT(Appeals) has not considered the submission of the assessee to the effect that firstly there was an arithmetical error committed by the AO while computing the value of shares of API industries Private Ltd and secondly, Ld. CIT(Appeals) has erred in facts and in law in not considering the fact that the company has gone into liquidation, and accordingly, the valuation of Rs. 26.39 per share of a company which is in financial distress, is clearly excessive and unreasonable. As in the interest of justice, we are restoring the matter to the file of Ld. CIT(Appeals) so that he may consider the above submissions made by the assessee and verify whether the shares were allotted to the assessee out of deposits held by the assessee in API industries Private Limited from previous financial year. Further, Ld. CIT(Appeals) may also verify the correct valuation of shares as per Income Tax Rules, taking into consideration the fact that the company was in financial distress and in the subsequent year it had also gone into liquidation. The assessee may furnish any supporting documents in support of the same, during the course of appellate proceedings.
|