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TMI Blog2021 (3) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... der Sec.143(3) r.w.s 147, dated 13.11.2014, the impugned order passed u/s 263 was thus barred by limitation is acceptable that as the alleged error was not the subject matter of the reassessment proceedings under Sec.147 of the Act, therefore, the period of limitation contemplated in sub-section (2) to Sec. 263 would stand triggered with reference to the date on which the initial intimation under Sec. 143(1) was passed in the case of the assessee company and the same by no means could be related to the date of passing of reassessment order under Sec. 143(3) r.w.s 147, dated 13.11.2014. The impugned order of revision passed by the Pr. CIT under Sec. 263 of the Act pertaining to the aforesaid issue which was not the subject matter of the reassessment order passed by the AO under Sec. 143(3) r.w.s 147, dated 13.11.2014, could have been validly passed within a period of two years from the end of the financial year in which the intimation under sub-section (1) of Sec. 143 sought to be revised was passed, which not having been so done within the aforesaid prescribed period was thus barred by limitation. We are of the considered view that the Pr. CIT had wrongly assumed jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e barred as per the ratio laid down by the Hon'ble Apex Court in Alagendran Finance Limited [(2007) 293 ITR 1] in so far as the issue of alleged accommodation entries by Shri Praveen Kumar Jain as per the impugned order is not the subject matter of the reason to believe for re-assessment proceeding, as such, the order u/s 263 is bad-in-law and liable to be quashed 4. That in the facts and circumstances of the case and in law, the Ld. Principal CIT has erred in passing the order u/s 263 by ignoring the decision of Hon'ble Apex Court in the case of Steller Investment Ltd. [2000 (7) TMI 76] and CIT vs. Lovely Exports [(2008) 216 CTR 195], wherein it was stated that, revisionary jurisdiction u/s 263 cannot be exercised for allegation of non-genuineness of share capital and if at all, the alleged share capital was bogus, the same can be added in the hands of shareholders and not in the hands of the appellant company. 5. That in the facts and circumstances of the case and in law, the impugned order is bad in law in so far as the Ld. Principal CIT erred in invoking jurisdiction u/s 263 of the Act without appreciating that if no addition is made on the issue for which reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al vide its order passed in ITA No. 5462/Mum/2017, dated 27.11.2017 set aside the order passed by the Pr. CIT-12, Mumbai under Sec. 263 of the Act and remitted the matter back to his file for passing an afresh order after hearing the assessee. In pursuance to the aforesaid order of the Tribunal, the Pr. CIT- 10, Mumbai, passed an order under Sec. 263 r.w.s 254, dated 28.12.2019, observing, that in the backdrop of the aforementioned information received from the DGIT(Inv.), Mumbai, the A.O while passing the reassessment order under Sec.143(3) r.w.s. 147, dated 13.11.2014 had failed to make necessary verifications as regards the genuineness of the share capital alongwith huge premium totalling to ₹ 2.18 crores received by the assessee during the year in question, the Pr.CIT was of the view that the same, thus, had rendered the reassessment order passed by the A.O as erroneous insofar as it was prejudicial to the interest of the revenue within the meaning of Sec. 263 of the Act. Accordingly, the Pr. CIT-10, Mumbai, vide his order passed under Sec. 263 r.w.s 254, dated 04.12.2019 set aside the reassessment order passed under Sec. 143(3) r.w.s 147, dated 13.11.2014, with a direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the ld. A.R that the A.O in the course of the reassessment proceedings did not make any addition with respect to the issue on the basis of which the case of the assessee was reopened. In the backdrop of the aforesaid facts, it was submitted by the ld. A.R that now when no addition was made by the A.O with respect to the issue on the basis of which the case of the assessee was reopened, it was, thus, not open to him to have independently assessed some other income on a standalone basis. It was further submitted by the ld. A.R that in case if some additional income/that had escaped assessment had came to the notice of the A.O in the course of the reassessment proceedings then, in the absence of any addition made as regards the issue on the basis of which the assessee s case was reopened under Sec. 147 of the Act, it was incumbent on his part to have resorted to a fresh set of reassessment proceedings for validly assessing such income that had escaped assessment. In support of his aforesaid contention the ld. A.R relied on the judgment of the Hon ble High Court of Bombay in the case of CIT-5, Mumbai Vs. Jet Airways (I) Pvt. ltd. (2010) 195 taxman 117 (Bom). In the backdrop of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt of Delhi in the case of CIT Vs. Stellar Investments Ltd. (1991) 192 ITR 287 (Del). It was submitted by the ld. A.R that the aforesaid order of the Hon ble High Court of Delhi had thereafter been upheld by the Hon ble Supreme Court in CIT Vs. Stellar Investments Limited (2001) 251 ITR 263 (SC), wherein the Special Leave Petition (for short SLP ) filed by the revenue was dismissed. Also, reliance was drawn by the A.R on the judgment of the Hon ble Supreme Court in the case of CIT Vs. Lovely Exports Pvt. Ltd. 317 ITR 218 (SC). In the backdrop of his aforesaid contentions it was averred by the ld. A.R that as the A.O while framing the assessment for the year under consideration i.e A.Y. 2009-10 had as per the law as was then available on the statute not made any addition towards the impugned unexplained share capital/premium in the hands of the assessee company, the same, thus being a possible and a plausible view taken by him could not have been dislodged by exercising of revisional jurisdiction by the Pr.CIT under Sec. 263 of the Act. In order to support his aforesaid claim it was submitted by the ld. A.R that the Hon ble Supreme Court in the case of Malabar Industrial Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pened on the standalone basis that the issue of its 2,18,000 shares of a face value of ₹ 10/- each at a premium of ₹ 90/- per share on 31.03.2009 as per the A.O was not justified. In fact, the A.O in order to fortify his aforesaid conviction had categorically observed that the book value per share by applying the Net asset value method as on 31.03.2008 was only ₹ 51.07 before the issue of fresh capital at a premium. Further, it was observed by him that after issue of fresh share capital the book value per share by applying the aforesaid method worked out at ₹ 68.27 per share on 31.03.2009. It was further observed by the A.O that the assessee company which was incorporated on 30.07.2009 had no asset base with any intrinsic value as per the details disclosed by the assessee in its return of income. Also, it was noticed by the A.O that the assessee had not earned any substantial profits or paid taxes in the year under consideration or in the preceding years. It was, thus, in the backdrop of his aforesaid observation that the A.O holding a reason to believe that the unjustified share premium was liable to be brought to tax in the hands of the assessee under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DGIT(Inv.), Mumbai, as a part of the basis leading to the reopening of the assessee s case. In fact, we concur with the contention of the ld. A.R that in case the A.O in the course of the reassessment proceedings would had come across certain information which revealed that the income of the assessee chargeable to tax and escaped assessment then, considering the fact that no addition was made as regards the issue on the basis of which the case of the assessee had been reopened, it was open for him to have issued a fresh notice under Sec. 148 with respect to the aforesaid escaped assessment that had came to his notice. Be that as it may, we are of a strong conviction that as the case of the assessee was never reopened on the basis of the information received by the A.O from the DGIT(Inv), Mumbai, that the assessee as a beneficiary had obtained accommodation entry of share capital/premium of ₹ 2.18 crores thus, in the absence of any addition made w.r.t the issue on the basis of which the case was reopened it was not open for the A.O to have made an addition in the backdrop of the aforesaid impugned information received from the office of the DGIT(Inv.), Mumbai. As such, not bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al/premium to the income of the assessee company as an unexplained cash credit. In the backdrop of the aforesaid settled position of law, we find favour with the claim of the ld. A.R that the A.O while framing the assessment in the case of the assessee for A.Y 2009-10, by not bringing the impugned amount of share premium to tax in the hands of the assessee company had thus, by so doing acted as per the mandate of law as then so available on the statute and thus, taken a possible and plausible view which by no means could have been dislodged by the Pr. CIT in exercise of his revisional jurisdiction under Sec.263 of the Act. 9. We shall now deal with the contention of the ld. A.R that as the period of limitation provided for under sub-section (2) to Sec. 263 in the present case was to be reckoned from the end of the financial year in which the intimation under sub-section (1) to Sec. 143 was passed in the case of the assessee, and not from the order of reassessment passed under Sec.143(3) r.w.s 147, dated 13.11.2014, the impugned order passed u/s 263 was thus barred by limitation. We find substantial force in the aforesaid claim of the ld. A.R that as the alleged error was not the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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