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2022 (9) TMI 77 - ITAT HYDERABADRevision u/s 263 by CIT - Whether order passed by the AO u/s 143(3) r.w.s. 153A should not be revised? - Determination of fair market value of shares - provisions of section 56(2)(vii)(c)(ii) applies and the difference amount of Rs.16/- per share which should have been assessed in the hands of the assessee, being the purchaser was not properly verified by the AO - HELD THAT:- Since in the instant case the assessee has purchased shares @ Rs.36/- per share on the basis of the last audited balance sheet as on 31.3.2013 therefore, in our opinion, the order passed by the PCIT disputing the valuation of shares is totally contrary to the statutory provisions. In our opinion, merely because the director of the seller company had made a statement, the same cannot be basis for addition in the hands of the assessee unless the same is sustainable within the four corners of law. AO is expected to examine the applicable provisions during the assessment proceedings. However, when the provision itself cannot be invoked, since the Balance Sheet for the year ending on 31.03.2014 was adopted and approved on 22.09.2014 i.e. after the shares were purchased, therefore as per the provisions of the I.T.Act, 1961 and I.T.Rules 1962, the AO was not required to examine the applications of section 56(2)(vii)(c)(ii) as wrongly recorded by the PCIT. In view of the above discussion, we are of the considered opinion, that the PCIT was not justified in disputing the valuation of the shares. We accordingly set aside the order passed u/s. 263 and the grounds raised by the assessee challenging the validity of 263 proceedings are allowed. Since, the assessee succeeds on the issue of validity of 263 proceedings, the grounds challenging the validity of assessment proceedings u/s.153A in absence of any incriminating material becomes academic in nature and therefore are not being adjudicated.
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