TMI Blog2021 (6) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 82,97,100/-, has totally ignored the explanation given by the Assessee before the Assessing Officer as well as before the Pr. CIT. The assessee has properly demonstrated through bank statement, the valuation under Rule 11UA along with audit report and audit trading account as relates to the FMV of the share premium. There is no prejudice to the revenue and Section 263 of the Act cannot be invoked in the present case. After going through the evidences and submissions the Assessing Officer passed the Assessment Order. While invoking Section 263 (1) of the Income Tax Act, 1961, the Pr. CIT has not made out the case that the Assessment Order is passed without making inquiries or verification which should have been made. There was no mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total deemed income of ₹ 20,300/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 through the system, and refund claimed in the return at ₹ 2,11,300/- was allowed to the assessee company. Later on, the case was selected for scrutiny through CASS due to the reasons that (i) Large share premium received during the year (ii) Unsecured loans from persons who have not filed their returns of income (form 3CD) and (iii) Mismatch in amount paid to related persons u/s 40A(2)(b) of the Act reported in the Audit Report and ITR. Assessment was completed on 13.12.2016 thereby making addition of ₹ 54,000/- in respect of non-charging interest on loans raised from other persons and disallowance of ₹ 75,000/- in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 263 of the Act passed by the Pr. CIT, the assessee filed present appeal before us. 5. The Ld. AR submitted that the Assessing Officer at the time of assessment proceedings has raised the query vide notice dated 12.08.2016 under Section 142(1) of the Act relating to party-wise detail, confirmation, ITR, balance sheet, bank statement of shares issued at premium of ₹ 86,92,200/- as well as asking the details / calculation of FMV of the share issued along with information / data / projection provided by the assessee to the independent auditor for ascertaining FMV of the share. The Ld. AR also pointed out that in assessment year 2013-14 the AO has raised same query vide notice under Section 142(1) of the Act dated 2610.2016. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The Ld. DR submitted that valuation report referred by the assessee / Ld. AR was not before the Assessing Officer. Further the Ld. DR submitted that no verification relating to proper fair market value of share premium was done by the Assessing Officer as the Director who has taken the share was not called for and also no notice under Section 133(6) of the Act was issued. The Ld. DR relied upon the following decisions: i. Denial Merchants Pvt. Ltd. Vs. ITO (Appeal No. 2396/Del/2017 order dated 29.11.2017) ii. CIT vs. Amithabh Bachchan 384 ITR 200 (SC) order dated 11.05.2016 iii. Surya Jyoti Software Pvt. Ltd. Vs PCIT (I.T.A. No.2158/DEL/2017) ITAT Delhi order dated 08.01.2018 iv. Shankar Tradex Pvt. Ltd. vs. PCIT (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed that the reasoning given by the Pr. CIT that the total share of 39,510 at ₹ 220/- per share against the face value of ₹ 10/- each and the received share premium to the tune of ₹ 82,97,100/-, has totally ignored the explanation given by the Assessee before the Assessing Officer as well as before the Pr. CIT. The assessee has properly demonstrated through bank statement, the valuation under Rule 11UA along with audit report and audit trading account as relates to the FMV of the share premium. Thus, there is no prejudice to the revenue and Section 263 of the Act cannot be invoked in the present case. After going through the evidences and submissions the Assessing Officer passed the Assessment Order. While invoking Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd 295 ITR 282, Malabar Industrial Co. Ltd. vs. CIT 243 ITR 83 are aptly applicable in the present case as the Hon ble Apex Court wherein it is held that Section 263 has to be read in conjunction with the expression erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the assessing officer cannot be treated as prejudicial to the interests of the revenue. For example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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