TMI Blog2023 (2) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... ack to the Ld. CIT(A) for deciding the issue afresh - Ground raised by the assessee is allowed for statistical purposes. Addition u/s 56(2) - allotment of shares - allegation that, appellant had received shares for a sum less than the FMV - HELD THAT:- In the instant case it is established that the assessee is holding 99.68% of the equity shares in the subsidiary company viz., M/s. UTPL. The assessee company being the holding company fully controls the management and affairs of M/s. UTPL. It is also noted that the entire assets and liabilities of the subsidiary company also belong to the assessee company as being a major shareholder and also the holding company. Considering the relationship between the assessee company and M/s. UTPL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Accountant Member For the Appellant : Sri GVN Hari, Advocate For the Respondent : Sri MN Murthy Naik, CIT-DR ORDER PER BENCH : This appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), Visakhapatnam [CIT (A)-3] in Appeal No. 211/2017-18/CIT(A)-3/VSP/2019-20, dated 31/10/2019 arising out of the order passed U/s. 143(3) r.w.s 153A of the Income Tax Act, 1961 [the Act] for the AY 2013-14. 2. Brief facts of the case are that the assessee is a company in the name and style of M/s. ATR Ware Housing Pvt. Ltd., Visakhapatnam is deriving income from business and capital gains, filed its return of income for the AY 2013-14 on 31/10/2016 declaring a total income of Rs. 1,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative furnished the information called for. Thereafter, another notice U/s. 142(1) was issued called for further details like books of account, bills Vouchers, details of share holders, breakup of certain items in the P L Account, balance sheet, confirmation letters in respect of unsecured loans, and applicability of section 14A, ledger extracts of expenditure above Rs. 5 lakhs, sundry creditors and a detailed note on the transactions with group concerns on the basis of material found and seized in the coursed of search and seizure operations conducted at the business premises of the applicant and residential premise of the Directors etc and the assessee was asked to furnish the information by 30/08/2017. After considering the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. AO, the assessee went on appeal before the Ld. CIT (A). On appeal, the Ld. CIT(A), after considering the submissions of the assessee as well as discussing the issues at length, partly allowed the appeal of the assessee. On being aggrieved by the decision of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following Grounds of Appeal: The order of the Ld. CIT(A)-3, Visakhapatnam is bad and unsustainable in the eyes of law as the same is passed without proper application of mind as it is also contrary to the spirit and provisions of the Income Tax Act, 1961. 1. That having regard to the facts and circumstances of the case, the present assessment pursuant to section 153A is not justified as the searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any proper opportunity to the assessee and hence it is bad in law. 5. Per contra, the Ld. DR supported the order of the Ld. CIT(A). 6. We have heard both the sides and perused the material available before us as well as the orders of the Ld. Revenue Authorities. We find merit in the argument of the Ld. AR that when there is an enhancement to the assessment made by the Ld. AO, an opportunity of being heard to the assessee shall be provided to the assessee. However, in this case, we find that no such opportunity was provided to the assessee. Therefore, following the principles of natural justice, we are of the considered view that the assessee shall be provided a reasonable opportunity with respect to enhancement of disallowance of int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable on record and the orders of the Ld. Revenue Authorities. As per section 56(2)(viia) of the Act, if any company in which the public are not substantially interested receives in any previous year from any person or persons any property being shares of a company for a consideration which is less than aggregate fair market value of the property by an amount exceeding Rs. 50,000/- of the aggregating fair market value of such property as exceeding such consideration shall be chargeable to tax under the head income from other sources. The procedure for computation of fair market value is prescribed under Rule 11U and 11UA of the IT Rules, 1962. However, in the instant case it is established that the assessee is holding 99.68% of the equit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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