TMI Blog2022 (7) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... ments to prove the three ingredients of Section 68 and further on another mistaken premise that the AO had made addition after considering all the submissions of the assessee. Hence, it could be safely concluded that the entire assumption of jurisdiction by the ld. PCIT u/s.263 of the Act is based on incorrect assumption of fact. On this primary ground itself revision order u/s.263 passed by the ld. PCIT deserves to be quashed and is hereby quashed. - Decided in favour of assessee. - ITA No.873/Mum/2022 - - - Dated:- 27-7-2022 - Shri M.Balaganesh, Accountant Member And Shri Rahul Chaudhary, Judicial Member For the Assessee : Shri Sanjay Sanghvi Shri Ujjval Gangwal For the Revenue : Shri K.C. Kanojiya ORDER PER M. BALAGANESH (A.M): This appeal in ITA No.873/Mum/2022 for A.Y.2016-17 preferred by the order against the revision order of the ld. Principal Commissioner of Income Tax-8, Mumbai u/s.263 of the Act dated 08/03/2022 for the A.Y.2016-17. 2. The only effective issue to be decided in this appeal is as to whether the ld. PCIT was justified in invoking revisionary jurisdiction u/s.263 of the Act in the facts and circumstances of the instant case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 142(1) notice dated 09 February 2018 03 March 2018 Genuineness and creditworthi ness Name, PAN and full address of the Shareholders 142(1} notice dated 09 February 2018 03 March 2018 Identity Form FCGPR submissions 142(1} notice dated 09 February 2018 OS March 2018 Genuineness Minutes of the board meeting held on 11 July 2015 and 07 September 2015 approving allotment of shares to the Shareholders 142U) notice dated 09 February 2018 05 March 2018 Genuineness Note on share capital Showcause notice dated 30 November 2018 04 December 2018 Bank statement of Mr Girish Hiranandani showing the payments made to the Assessee Showcause notice dated 30 November 2018 04 December 2018 Genuineness and creditworthi ness Fund transfer form authorising transfer of funds from Mr Manish Hiranandani's bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals) against the order of assessment, and the same is pending. In order to bring the said premium component of Re.1/- per share to tax, the ld. PCIT invoked revision jurisdiction u/s.263 of the Act and issued a show-cause notice to the assessee in this regard, by treating the order of the ld. AO as erroneous in as much as it is prejudicial to the interest of the revenue. The assessee gave a detailed reply before the ld. PCIT vide letter dated 19/01/2022 enclosing the same documents that were filed before the ld. AO in the form of supporting evidences proving the three necessary ingredients of section 68 of the Act. The fact of assessee filing its elaborate submissions vide letter dated 19/01/2022 is also duly acknowledged by the ld. PCIT in para 3 of his order. The assessee also submitted before the ld. PCIT that the ld. AO had wrongly applied the provisions of Section 68 of the Act without going through the documents placed on record. The assessee also submitted that during the previous year relevant to A.Y.2016-17, the assessee company had received share premium to the tune of Rs.46,03,578/- only. The balance share premium of Rs.39,35,902/- (Rs.85,39,480/- Rs.46,03,578/-) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gether with KYC documents of the shareholders in Dubai. The ld. AR argued that all these documents collectively prove that their identity stands established beyond reasonable doubt. The assessee had also furnished the bank statement of Mr. Girish Hiranandani and Mr. Manish Hiranandani kept with HSBC Jebel Ali, DubaiUAE, duly highlighting the transactions of transfer of funds from that bank account to the bank account of the assessee company. These bank statements are enclosed in pages 26-35 of the paper book. The assessee had also furnished independent Chartered Accountant valuation certificate justifying the issue of shares at a premium using DCF method. The ld. AR argued that all these documents collectively prove that the share holders have sufficient creditworthiness to make investment in assessee company. Further, the shareholders had made investment in automatic FDI route by way of transfer of funds through regular banking channels in compliance with FEMA gruidelines and RBI approvals. The assessee had also furnished Foreign Inward Remittance Certificate (FIRC) for monies received from non-resident shareholders. Admittedly, these FIRCs are issued by assessee s bankers namely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. Hence, we do not want to give any finding or opinion on the veracity of the addition made u/s.68 of the Act in respect of face value of Rs.10/- per share. At the same time going by the documents filed by the assessee both before the ld. AO and before the ld. PCIT, which fact had been duly acknowledged by both the parties in their respective orders, we find that the ld. PCIT had erred in assuming revision jurisdiction u/s.263 of the Act in the instant case as it is based on the mistaken premise that assessee had not furnished any documents to prove the three ingredients of Section 68 of the Act and further on another mistaken premise that the ld. AO had made addition after considering all the submissions of the assessee. Hence, it could be safely concluded that the entire assumption of jurisdiction by the ld. PCIT u/s.263 of the Act is based on incorrect assumption of fact. On this primary ground itself revision order u/s.263 passed by the ld. PCIT deserves to be quashed and is hereby quashed. 3.6. In view of the aforesaid observations and respectfully following the judicial precedents relied upon hereinabove, we hold that the ld. PCIT erred in invoking revisionary jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X
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