9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (10) TMI 1017 - AT - Income TaxRevision u/s 263 by CIT - unexplained share application money - HELD THAT - We agree with the contentions advanced by the ld AR that the share transactions are duly reflected in the bank statement as well as in the balance sheet of the investor company and therefore, the same cannot form the basis for holding that the order passed by the Assessing officer was erroneous as he failed to consider such discrepancies. Regarding identity and creditworthiness of the investor company and genuineness of the transaction, we find that where the ld PCIT has himself accepted the fact that the share application money atleast to the extent of ₹ 20 lacs has been received through the banking channel from Maxius Ventures, the identity and nature of the transaction is very much accepted by him. Regarding creditworthiness, the assessee has submitted that during the course of reassessment proceedings, the assessee has submitted the copy of bank statement of the investor company which shows clearly the money standing to the credit of the investor company account from its share trading business and out of which, the investment has been made in the assessee s company. Further, the assessee has submitted copy of balance sheet, income-tax return, company master data available on MCA website of the investor company which has details of its directors/shareholders and other relevant details as well as copy of confirmation from the investor company. Besides, the Assessing officer has also directly called for information from the investor company u/s 133(6) and has verified the same with the books of accounts of the assessee company. We therefore find that where the assessee has submitted all these documentation and the same has been duly examined by the Assessing officer by independently calling for the information and cross-verifying the same with the investor company and with the books of accounts of the assessee company, it cannot be held that the Assessing officer has failed to carry out proper verification of the transaction under consideration. We are of the considered view that there is no legal and justifiable basis to interfere with the findings of the Assessing officer as the necessary enquiries and examination as reasonably expected have been carried out by the Assessing officer and he has taken a prudent, judicious and reasonable view after considering the entire material available on record and the order so passed u/s 143(3) r/w 147 cannot be held as erroneous in so far as prejudicial to the interest of Revenue.- Decided in favour of assessee.
Issues Involved:
1. Validity of the order passed under Section 263 of the Income Tax Act, 1961. 2. Examination of share application money received from Maxius Ventures Pvt. Ltd. 3. Verification of identity, creditworthiness, and genuineness of the transaction. Issue-wise Detailed Analysis: 1. Validity of the Order Passed Under Section 263 of the Income Tax Act, 1961 The appeal was filed against the order of the Principal Commissioner of Income Tax (PCIT), Jaipur, under Section 263 dated 31.03.2021 for the Assessment Year (A.Y) 2011-12. The PCIT found the assessment order passed under Section 147 read with Section 143(3) dated 31.12.2018 to be erroneous and prejudicial to the interests of the Revenue. The PCIT issued a show-cause notice to the assessee to explain why the assessment order should not be revised under Section 263. The PCIT held that the Assessing Officer (AO) failed to verify the issue of unexplained share application money, making the assessment order erroneous and prejudicial to the Revenue's interests. 2. Examination of Share Application Money Received from Maxius Ventures Pvt. Ltd. The PCIT identified discrepancies in the share application money received from Maxius Ventures Pvt. Ltd., amounting to ?45,00,000/-. The PCIT noted that the bank statement of Maxius Ventures Pvt. Ltd. showed an investment of only ?20,00,000/- instead of ?45,00,000/-. The assessee contended that the PCIT considered only part of the bank statement and missed the entry of ?25,00,000/- dated 09-09-2010. The assessee provided complete bank statements, transaction inquiry reports, and other relevant documents to verify the total investment of ?45,00,000/-. 3. Verification of Identity, Creditworthiness, and Genuineness of the Transaction The assessee argued that the AO had verified the genuineness of the transaction, identity, and creditworthiness of the investor, Maxius Ventures Pvt. Ltd., during the assessment proceedings. The AO obtained documents such as bank statements, confirmations, income tax returns, balance sheets, and company master data from the investor. The AO also called for information under Section 133(6) directly from the investor company and verified it with the assessee's books of accounts. The PCIT, however, held that the AO did not properly apply his mind to the information available on record. The PCIT noted that the AO failed to verify the unexplained share application money and the decrease in the investment figure in the balance sheet of Maxius Ventures Pvt. Ltd. The PCIT concluded that the assessment order was erroneous due to non-application of mind, incorrect assumptions of facts, and incorrect application of law, which was prejudicial to the interests of the Revenue. Tribunal's Findings: The Tribunal found that the reassessment order was set aside to be made de novo after proper examination of the genuineness of the share capital. The Tribunal noted that the reassessment proceedings were initiated to examine the genuineness of share application money received from four entities, including Maxius Ventures Pvt. Ltd. The AO had examined the matter, called for information, and accepted the transactions relating to three entities, including Maxius Ventures Pvt. Ltd., as genuine. The Tribunal agreed with the assessee's contention that the share transactions totaling ?45,00,000/- were duly reflected in the bank statements and balance sheets of the investor company. The Tribunal held that the AO had carried out the necessary verification and examination of the transaction under consideration. The Tribunal found no legal and justifiable basis to interfere with the AO's findings and concluded that the order passed under Section 143(3) read with Section 147 was not erroneous or prejudicial to the interests of the Revenue. Conclusion: The Tribunal set aside the order passed by the PCIT under Section 263 and sustained the order of the AO. The appeal of the assessee was allowed, and the Tribunal pronounced the order in the open Court on 22/10/2021.
|
