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TMI Blog2023 (6) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... t during the year under consideration, it issued 1554 Equity shares of face value of Rs. 10/- to Rohan Builders and Developers Pvt. Ltd. at Rs. 6,526.96 per share. In addition, 8406 Equity shares of face value of Rs. 10/- were issued to Indospace Ventures II, a company incorporated in Mauritius, also at Rs. 6,526.96 per share. All the necessary details in respect of the share transactions, namely, Income-tax returns, Bank statements, Share Valuation Certificates, Share Certificates and justification for the quantum of share premium were furnished before the AO. It was also submitted that the assessee had suo motu offered to tax a sum of Rs. 1,84,305/- u/s. 56(2)(viib) of the Act, being, excess amount received on allotment of shares vis-à-vis the fair market value in the case of shares allotted to Rohan Builders and Developers Pvt. Ltd. As regards the allotment of share to Indospace Ventures II, the assessee submitted that this company was a non-resident and hence, the provisions of section 56(2)(viib) of the Act were not applicable. After examination of all the details/documents and verification of the facts, the AO got satisfied and completed the assessment u/s. 143(3) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plies have been placed at pages 5 and 6 onwards of the paper book. Notice u/s 142(1) was issued by National e-Assessment Centre on 09-11-2020 seeking details of share premium, such as, Name and address of the shareholders; PAN of the shareholders; Face Value and Premium on each share; Number of shares allotted to each shareholder; Total value of the shares allotted to each shareholder; and Payment received from each shareholder during the financial year. The assessee was further required to furnish documentary evidence to substantiate the Identity and Income-tax returns of the shareholders along with the valuation report. The assessee replied on 24-11-2020, whose copy is available at page 10 onwards of the paper book, submitting details with respect to fresh issue of Equity shares during the year. The details included Name and Address of the shareholders; PAN Numbers; Face Value; Premium on each share; No. of shares allotted; Total value of shares allotted; and Premium received from each shareholder. The assessee also furnished documentary evidence, such as, Income-tax returns, Audit report of the parties, Bank statements etc. to substantiate the Identity and Creditworthiness of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not require any specific resolution as the key to the contradiction is evident from the above discussion about the AO conducting thorough enquiry, seeking necessary details, getting the information and then getting satisfied about the appropriateness of the amount of share premium. 4. Proceedings u/s. 263 can be invoked when the assessment order is erroneous and prejudicial to the interest of the Revenue. In the present context, there can be two broad situations, viz., one, where the AO does not initiate the taking up of an issue which apparently requires consideration at his end during the course of the assessment proceedings or where he initiates and seeks information but the assessee fails to supply the same and still the claim of the assessee gets accepted; and two, where the AO initiates the taking up of the issue which requires consideration at his end by calling for necessary details from the assessee and such details are also filed by the assessee. The second situation can have further two sub-situations, viz., one, where the assessee files reply and the AO allows the claim silently without considering the necessary material filed by the assessee or without making any d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the extant case falls in the second sub-situation of the second situation discussed supra, where the AO did initiate the taking up of the issue of share premium, which was properly replied by the assessee furnishing all the necessary details including the particulars of the shareholders and valuation report etc. and the AO accepting the claim by expressly getting satisfied with a specific mention of the same in the assessment order. At this juncture, it is pertinent to mention that the share premium was realized by the assessee from the existing shareholders on right issue of shares. Further, it is nobody's case that either the assessee or the shareholders are penny stock companies. The AO having received and considered the relevant details and passed a speaking order, could have been subjected to revision only on specifically pointing out the mistake in the assessment order. Au contraire, the ld. PCIT proceeded on incorrect assumption of fact that: `the AO, while framing assessment failed to conduct enquiries to examine and verify the reasonableness and genuineness of share premium receipt of Rs. 1,01,27,356/- from M/s Rohan Builders ...as the claim of share premium receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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