TMI Blog2018 (4) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 - - - Dated:- 1-3-2018 - Sh. Rajendra, Accountant Member and Amarjit Singh, Judicial Member Revenue by: Shri Rajat Mittal-DR Assessee by: Dr K. Sivaram/Shri Aditya Ajgaonkar ORDER Per Rajendra, AM Challenging the order dated 22/04//2016 of CIT(A)-2, Mumbai the Assessing Officer (AO) filed the present appeal. Assessee-company, engaged in the business of providing infrastructure and commercial facilities filed its return of income on 07/09/2011 declaring total income of ₹ 2. 97crores. The AO completed the assessment u/s. 143(3) r. w. s 147 of the Act on 09/01/ 2015, determining the income of the assessee at ₹ 5. 94 crores. 2. Solitary Ground of appeal is about deleting the addition made on account of premium received by the assessee. During the re-assessment proceedings, the AO observed that the assessee had received premium money amounting to ₹ 2. 97 crores as share application money. He directed the assessee to submit details in that regard and to explain as to how the share premium was determined, that it had issued 3000 equity shares of face value of 100 each at the premium of ₹ 9, 900/- that it received share application mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing directors meeting, that the profit earned by the assessee after-tax for the year under consideration was ₹ 4, 24, 69, 844/-, that EPS of the assessee was ₹ 44, 234/-, that it had charged premium of ₹ 10, 000/-per share. He referred to page number 18 of the paper book and relied upon the cases of Greeen Infra Ltd. (145 ITD 240) and Greeen Infra Ltd. (392 ITR 7). 5. We have heard the rival submissions and perused the material before us. We find that the assessee had received share premium money at the rate of 10, 000/-per share, that the AO made an addition of ₹ 2. 97 crores to the income of the assessee invoking the provisions of section 68 of the Act, that it had obtained a valuation report from a CA about the market value of the shares, that the earning per share of the assessee was more than ₹ 40, 000/-that it had charged premium of ₹ 10, 000/-only per share, that the existing director said purchase the shares. In our opinion, once a valuation report this opted by an assessee from a professional it has to be given due weightage, until and unless it is proved that same was factually incorrect or was obtained by fraud. It had charged 1/4t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grity and credibility cannot be doubted. 11. The Ld. Departmental Representative has raised an altogether plea by stating that the nature of the transaction should also be judged within the parameters of the Sec. 68 of the Act. The counsel for the assessee strongly objected to this but in the interest of justice and fair play, we allowed the DR to raise this issue. For this, we draw support from the decision of the Hon'ble Supreme Court in the case of Kapurchand Shrimal v. CIT [1981] 131 ITR 451/7 Taxman 6, wherein the Hon'ble Supreme Court has laid down the ratio that It is well known that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute. 11. 1 Considering the submissions of the Ld. DR in the light of the above ratio, let us test the transaction in the light of the provisions of Sec. 68 of the Act. As per Section 68 the initial onus is upon the assessee to establish identit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be said to be sham. 12. We have considered the grievance of the Revenue from all possible angles and by applying the provisions of Sec. 56 of the Act and at our stage we have gone to the extent of testing the transaction within the parameters of Section 68 of the Act. We could not find a single evidence which could lead to the entire transaction as sham. Our view is also fortified by the share holding pattern as explained to us and as substantiated by the material evidence on record. We find that the share holders in all the related transaction under issue are directly or indirectly related to the Government of India. Therefore, considering the entire issue in the light of the material evidence brought on record, in our considerate view, the Revenue authorities have erred in treating the share premium as income of the assessee u/s. 56(1) of the Act. In our considerate view, for the reasons discussed hereinabove, we do not find it necessary to apply the provisions of Sec. 68 of the Act. We, therefore, direct the AO to delete the addition of ₹ 47, 97, 10, 000/-. Ground No. 2 3 are accordingly allowed. The Hon ble Bombay High court, confirming the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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