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2023 (1) TMI 179 - HC - Income TaxRevision u/s 263 by CIT - sale of shares held by the respective appellants in Sri Solaiandavar Textile Mills Limited was sold to their father for a sum of Rs.4/- per share as against the nominal value of share at Rs.10/- per share was against the market value of Rs.19.33 per share - HELD THAT:- We are of the view that the order passed by the Assessing Officer while finalising the assessment under Section 143(3) of the Income Tax Act, 1961 has indeed resulted in erroneous order which were prejudicial to the interest of the revenue. The Supreme Court in the case of Malabar Industrial Co. Ltd [2000 (2) TMI 10 - SUPREME COURT] held that an order can be said to be erroneous, if no inquiries or verification are made by the AO before passing an order; or if an order is passed “without application of mind” i.e. non application of mind to relevant material; or if an order is not in accordance with fact or law i.e. if there is an incorrect assumption of facts or an incorrect application of law. The facts of the present case reveal that the invocation of power under Section 263(3) was justified. Though the said company viz., M/s.Sri Solaiandaver Textile Mills Limited had closed down its business in the year 2002, it was endowed with sufficient valuable assets in the form of land. Therefore, the value of the shares ought to have been properly determined by the appellant and the Assessing Officer. The value of the share has been under valued by making it seem that the transfer to their father was only at Rs.4/- per share without any records. When the records were culled out by the Commissioner, the value of the share was re-determined at Rs.19.33 per share as against the nominal value of Rs.10/- per share. We therefore, find no reason to differ with the views expressed by the Tribunal the value of the shares were undervalued. We therefore answer the substantial questions of law against the appellant and in favour of the Income Tax Department. Appeal dismissed.
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