TMI Blog2018 (12) TMI 1886X X X X Extracts X X X X X X X X Extracts X X X X ..... OURT] Hon ble Supreme Court in the case of CIT vs. Lovely Exports (P) Ltd [ 2008 (1) TMI 575 - SC ORDER] . Revision order passed by PCIT under section 263 of the Act is not sustainable because the very basis of the order is that as per the information received from DCIT, Central Circle 2(2), Mumbai the assessee company is one of the beneficiaries of accommodation entry of bogus share premium from Secunderabad Healthcare Pvt. Ltd., the company operated by Shirish Shah, the company has been declared as shell company. We find that the PCIT has no where brought on record what was the information with him in regard to this aspect and how the receipts in the shape of share application money from Secunderabad Healthcare Pvt. Ltd. is part of bogus share premium as alleged by the PCIT. The assessment order framed by the AO is neither prejudicial to the interest of the Revenue nor erroneous for the reason that this information was not available at the time of framing assessment if at all it is true and for this the order cannot be held to be erroneous and prejudicial to the interest of the Revenue. Hence, we are of the view that the revision order be cannot be sustained and accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds share capital and the view of Hon ble Pr. CIT that the case have not been enquired into and the claim of the Appellant has been allowed without proper enquiry and this error of the Ld AO is resulted into prejudice to the revenue is not within the meaning of section 263 of the Act. 5. The Hon ble Pr. CIT failed to appreciate the facts the Appellant had provided all the details of the above party, its creditworthiness, identity and genuineness vide Appellant's letter dated 21.3.2016 and which was as per the provision of section 68 of the Act. The provision of section 68 is invoked when identity, the nature and source of such amount credited, is not explained. 6. The Hon'ble Pr. CIT failed to appreciate the facts there is no direct evidence against the Appellant and there is no reference to any direct statement against the Appellant, if any, recorded from Mr. Shirish Shah in respect Secunderabad Healthcare Ltd, the investor and issue of notice u/s 263 on the basis of third party information does not result into prejudice to the revenue within the meaning of section 263 of the Act. 7. The Hon'ble Pr. CIT failed to appreciate the facts that the notice is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Subsequently, the PCIT-8, Mumbai issued show cause notice vide No. Pr. CIT-8/263/Show-cause/Taper-Trading/17-18 date: 09.11.2017, wherein he observed that the assessee company has issued 15.40 lacs equity shares to Secunderabad Healthcare Ltd.at the face value of ₹ 10 and premium of ₹ 490 per share and out of these 1.40 lacs shares were issued in FY 2011-12 relevant to AY 2012-13 and balance 14 lacs shares, the assessee has credited the share premium of ₹ 5,48,80,000/- and face value at ₹ 11,20,000/- for AY 2013-14 relevant to FY 2012-13. Further, it is seen from records that Secunderabad Healthcare Ltd has been allotted 1.40 lacs shares on which assessee has received ₹ 2 per share and a premium of ₹ 98 per shares i.e. partly paid share in FY 2011- 12 relevant to AY 2012-13. Accordingly, the assessee has disclosed share premium received in balance sheet of ₹ 1,37,20,000/- and an amount of ₹ 2.80 lakhs on account of partly paid share in AY 2012-13. The remaining amount of share face value and share premium i.e. amounting to ₹ 5,48,80,000/ was received by assessee as share premium and ₹ 11,20,000/- balance face value of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant submits, as per the provisions of section 68 of the Act, where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any share capital and the nature and source of such amount credited, is not explained then the said amount is to be treated as cash credit under section 68. However, in the case of the assessee it had provided all the details of the above party, its creditworthiness, identity and genuineness vide Assessee's letter dated 21.3.2016. Hence, the assesse had complied with the provisions of section 68 and all the enquiries are made by the Ld. AO were within the provision of Act. As such, the action Ld. AO had not resulted into prejudice to the revenue within the meaning of section 263 of the Act. 8. In respect of accommodation entries as mentioned in your notice u/s 263, there is no reference to any direct statement against the Assessee, if any, recorded from Mr. Shirish Shah in respect Secunderabad Healthcare Ltd. Your office had issued the notice simply expressing the view that the assessing officer had not conducted proper enquiry and verification of the facts with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fair market value of the shares determined in accordance with the prescribed method is not valid reason to cancel the assessment order or revision u1s263. As such, the order passed by the Ld. AO is not erroneous and more so, not prejudicial to the interest of the revenue. The Assessee submits that shareholder company Secunderabad Healthcare Ltd is active Company and still in existence, which is based xzon the snap shot of the Master Data of the said Company in public domain of MCA website as on Dec 5,2017 is attached herewith, wherein the status is shown as Active . 7. The PCIT consider the submissions of the assessee and noted that the assessee company is one of the beneficiaries of accommodation entries of bogus share premium from Secunderabad Healthcare Ltd., the company operated by one Mr. Shirish Shah and the said company has been declared as shell company in public domain. The learned PCIT also noted that Mr. Shirish Shah of Ahmedabad, arranged these book entries through one of his group companies operated by him and this aspect was never examined by the AO while completing the assessment. According to him, the assessment order is erroneous and prejudicial int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85 16 Appellant's objections to reasons for reopening dated 15.04 18 86-92 17 AO's Rejection of Appellant's Objections to Notice u/s-148 dt.14.06.18 93-98 9. The learned Counsel for the assessee stated that the share application money and share premium was explained in AY 2012-13 and the entire details were before the AO in AY 2012-13. According to him, even during the course of assessment proceedings for AY 20130-14 i.e. the order under consideration, the assessee filed explanation regarding transactions with respect to receipts of Secunderabad Healthcare Ltd. The learned Counsel for the assessee relied on the Tribunals order, Ahmedabad Bench in the case of Torrent Pharmaceuticals Ltd. vs. DCIT in ITA No. 164/Ahd/2018 vide order dated 2014-15 and M/s Indus Best Hospitality Realtors Pvt. Ltd. vs. PR CIT-6 in ITA No. 3125/Mum/2017 vide order dated 19.01.2018, wherein Para 9.5 in the case of Torrent Pharmaceuticals (supra) read as under: - 9.5 We thus find merit in the plea of the assessee that the Revisional Commissioner is expected show tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and the relevant explanation 2 as inserted by Finance Act, 2015 with effect from 01.06.2015 was referred to. Apart from that the learned Sr. Departmental Representative relied on the following 24 case laws: - 1. ITO vs. Spartacus Farms P Ltd (2018) 91 Taxmann.com 15 (Mumbai-Trib.) 2. Royal Rich Developers Vs. DCIT 3. ITO Vs. Blessings Commercial P Ltd. (2018) 91 taxmann.com 176 (Kolkata-Trib.) 4. Ankit Agrochem Vs. JCIT (2018) 89 taxmann.com 45 (Rajasthan) 5. Konark Structural Engineering P. Ltd. Vs. DCIT (2018) 90 taxmann.com (Bombay). 6. Prem Castings Vs. CIT (2017) 88 taxmann.com189 (Allahabad) 7. Kottenz India Manufacturing P. Ltd Vs. DCIT (2018) 95taxmann.com291 (Gujarat) 8. Aradhna Estate P. Ltd. Vs. DCIT (2018)95taxmann.com241(Gujarat) 9. MSK Real Estate vs. DCIT (2018)95 taxmann.com241(Gujarat). 10. Aishwarya Dying Mills P. Ltd Vs. DCIT (2018) 94 taxmann.com430 (Gujarat) 11. Khatu Shyam Processors P Ltd vs. DCIT (2018) 94 taxmann.com429 (Gujarat) 12. Pr. CIT vs. Best Infrastructures (2018) 94 taxmann.com115(SC) 13. Pratik Syntex Vs. ITO (2018)94 taxmann.com12 (Mumbai-Trib) 14. DRB Exports Vs. CIT (2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs were issued to Secunderabad Healthcare Pvt. Ltd. at a premium of ₹ 490 per shares in AY 2012-13. However, the share premium was credited amounting to ₹ 1,37,20,000/- in AY 2012-13 and balance was credited in AY 2013-14 i.e. ₹ 5,48,80,000/-. It means that the assessee has issued these equity shares in the AY 2012-13 and not the relevant AY 2013-14. Only part payment on account of share premium and face value of share is received in this year i.e. AY 2013-14. 12. In view of the above facts, we find that the assessee has filed complete details of all share holders of the company with full name and address of all share holders along with details of PAN. Even while completing assessment for AY 2012-13, all these details were filed before the AO regarding allotment of 1.40 lakhs shares at a premium to Secunderabad Healthcare Ltd. and all details resolution copies, bank statements, payment of call money letters and PAN Card Xerox were filed. 13. In view of the above facts and circumstances, we are of the view that in the given facts of the present case the issue is covered on merits by Hon ble Bombay High Court in the case of CIT vs. Orchid Industries Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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