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TMI Blog2018 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... received share application money during the year under consideration and shares have been allotted during A.Y. 2014-15 to M/s AMQ Agro, therefore, in our considered opinion as Sec.2(22)(e) of the Act is not applicable to this transaction, the order passed by Ld.AO cannot be treated as erroneous, and therefore, order passed u/s 263 of the Act cannot be upheld. - Decided in favour of assessee - ITA No. 2394/Del/2018 - - - Dated:- 28-9-2018 - Sri R. K. Panda, Accountant Member And Smt. Beena A Pillai, Judicial Member For the Assessee : Sh. Hiren Mehta, C.A. For the Revenue : Ms. Rachna Singh, CIT, D.R. ORDER PER BEENA A PILLAI, JUDICIAL MEMBER Present appeal has been filed by assessee against order dated 30/03/18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion wing, in case of M/s AMQ India Pvt. Ltd., on 15/02/14. During search certain incriminating documents/hard disk pertaining to assessee were found and seized. The case was centralised and notice under section 153C of the Act was issued, in response to which, return declaring Nil income was filed. 2.1 . Ld. AO completed assessment under section 153C read with 143(3) of the Act, based upon seized materials belonging to assessee by making addition on account of unexplained investment in purchase of land. 2.2 . Ld.CIT upon examination of assessment record observed that Assessing Officer completed assessment without proper examination/verification of accounts. He accordingly issued show cause notice under section 263 of the Act on 06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted profit for the individual benefit which was not explained by assessee. The AO has failed to take into account the provision of s.2(22)(e) of the Act in determining the income of assessee. Thus the approach of AO in not making assessable income and without discussing the provision of section 2(22)(e) is prima facie appears to be erroneous so as to cause prejudice to the interest of Revenue. 3. Thus, the assessment order passed in your case is appears to be erroneous and prejudicial to the interest of the revenue for the reasons stated as above. 4. In view of the aforesaid facts, you are hereby required to show cause as to why the assessment order passed in your case by the Assessing Officer, Central Circle-19, New Delhi on 31.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that under such circumstances assessment order cannot be held to be erroneous and prejudicial to the interest of the revenue. 2.4 . Ld.CIT on perusal of reply of assessee held as under: 4. I have perused the assessment records and submissions made by the assessee in this case. Assessee s submission considered and is found to have prima facia merits. However, there were amount of ₹ 2,50,00,000/- shown as share application money but there was not bifurcation provided in balance sheet about nature and source of share application money. Also assessee submission that issue of deemed dividend was examined during assessment proceedings and addition of ₹ 6,43,198/- was made, is not correct. The only addition of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er law after providing due opportunity to the assessee. 3. Aggrieved by order of Ld.CIT, assessee is in appeal before us now. 3.1. Ld.AR submitted that, s. 263 proceedings has been initiated by holding that Assessing Officer has not verified applicability of section 2 (22) (e) of the Act during assessment proceedings. He submitted that money received on behalf of M/s AMQ Agro India Pvt. Ltd. was towards share application during the year under consideration and assessee has issued shares to M/s AMQ Agro India P Ltd. in subsequent Assessment Year. He referred to audited accounts of assessee placed in paper book. He submitted that there are no amounts received as loans and advances from M/s AMQ Agro India P Ltd. in order to chec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings initiated by Ld.CIT is correct. 5. We have perused the submissions advanced by both the sides in the light of the records placed before us. 6. From assessment order we find that, there has been no specific investigation by Ld.AO regarding applicability of section 2(22)(e) of the Act. However, at the time of proceedings initiated by Ld.CIT u/s 263 assessee filed reply dated 26th March, 2018 in response to notice dated 6th Feb., 2018 issued u/s 263 of the Act. It is observed that assessee in its reply submitted the amount received from M/s AMQ Agro India Pvt. Ltd. was on account of share application money and not on account of loans and advances. Ld.A.R. referred to audited financial statements of assessee as on 31.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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