9911796707
TMI Blog2024 (3) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of admission of additional evidence, also additional grounds have been submitted for admission taking shelter of settled principle of law as laid down in the case of NTPC [ 1996 (12) TMI 7 - SUPREME COURT ] therefore, in the interest of justice the matter requires to be restored back to the files of Ld. CIT(A) for fresh adjudication. Herein, it would be pertinent to mention that on similar aspect and issues under the identical circumstances in the case of group concern of the assessee M/s Riya Real Estate Private Limited for the AY 2012-13 2013-14, coordinate bench of the ITAT Raipur [ 2023 (11) TMI 198 - ITAT RAIPUR ] had set aside the matter to the files of Ld. CIT(A) - Appeal of assesee allowed for statistical purposes. - Shri Ravish Sood, JM And Shri Arun Khodpia, AM For the Assessee : None For the Revenue : Shri S.K. Meena, CIT-DR ORDER PER ARUN KHODPIA, AM: The present appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals)-I, (in short CIT(A) ) dated 05.01.2018 for the assessment year 2012-13 which in turn arose from the common order u/s 153A r.w.s. 143(3) of the Income Tax Act, 1961 (In short 'The Act') for the AY 2007-08 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Without prejudice to the Grounds of Appeal raised in the Form Of Appeal as aforesaid, the Appellant prays for the admission and adjudication by the Hon ble Tribunal, of the following Additional Ground of Appeal which is purely legal goes to the root of the matter, which do not require investigation into, or examination of, any new facts or evidence that were not already available before the Ld.AO and Ld. ClT(Appeals); this merely involves interpretation of the provisions of the Income-tax Act, 1961 ('the Act) which the Hon ble Tribunal is otherwise competent to do, in view of the principles laid down by the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 383 (SC). Before Ground No. 1, the following grounds may kindly be allowed to be added: (i) That the Search Assessment Order framed u/s. 153A r.w.s. 143(3) of the Act Dated 08.11.2016 by the Ld. AO and affirmation of the same by the Ld.CIT(Appeals) is highly illegal, invalid, void ab initio and bad in law in as much as the jurisdiction to frame the assessment could not have been validly assumed by the Ld.AO since, the assessment was made dehors any incriminating material or docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission of additional Evidences. MOST RESPECTFULLY SHEWETH : 1. That an ex-parte Appellate Order under the provisions of section 250 of the Income Tax Act, 1961 ( the Act ) was passed by the Ld. Commissioner of Income Tax (Appeals)-l, Raipur on 5th January, 2018 ( the Ld. CIT(A) ) thereby confirming the humongous addition to the tune of Rs. 215.25 Cr. under the provisions of section 56(2)(viia) of the Act made in the Search Assessment Order passed by the Ld. Asst. Commissioner of Income Tax, Central Circle - 2, Raipur ( the Ld.AO ) under the provisions of section 153A r.w.s. 143(3) of the Act on 8th November, 2016 briefly upholding the findings conclusions recorded in the above referred search assessment order. 2. That aggrieved with the same, the appellant herein has filed the captioned appeal under the provisions of section 253 of the Act before the Hon'ble Income Tax Appellate Tribunal, Raipur Bench on 2nd April, 2019 which have been numbered as ITA No.66/RPR/2019 as mentioned above. 3. That the original return of income was filed under the provisions of section 139(1) of the Act on 28.09.2012 declaring a total loss of Rs. 20,50,451. Pursuant to search u/s. 132(1) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid Share Issuer Company viz. AMPL were reeling under great financial stringency/severe financial crisis and hence, incapable of honouring the borrowing commitments of various banks financial institutions which thereafter initiated stern recovery proceedings hence, to obtain the documentary evidences to support the appeal cases was an onerous task. Finally, insolvency proceedings were instituted by various financial creditors against most of the group companies including the aforesaid AMPL (treating them as Corporate Debtor ) under the provisions of section 7, 9 10 of the IBC, 2016 before the Benches of Hon'ble NCLT and subsequently, the Insolvency Petitions filed by the Financial Creditor(s) were 'admitted' and Resolution Professionals were appointed for initiation of Corporate Insolvency Resolution Process. That, owing to severe financial crisis, at the relevant time, the skilled experienced accounts personnel left their jobs, leaving behind a few employees who were still new to the nuances of assessment/appellate procedure and hence, there was complete lack of co-ordination between all the factions involved and time required for making compliances was also insuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cious powers vested in your honours under Rule 29 in order to impart justice to the appellant. For such Act of Kindness, the appellant shall ever pray. 5. At the outset, it is observed that the present case was fixed for hearing on several occasions i.e. on 08.06.2022, 01.08.2022, 03.01.2023, 29.05.2023, 28.06.2023, 09.08.2023, 07.09.2023, 06.11.2023, 23.11.2023, 10.01.2024 and 05.03.2024, on the various dates of hearing only on 3 occasions assessee s representative was appeared however, other than those 3 occasions there was no representation on behalf of the assessee. The Authorized Representative of the assessee has also withdrawn his power of attorney / Vakalat Nama, showing his inability to represent the case owning to some personal reasons/ difficulties and unavoidable constrained to continue as a counsel of the assessee by submitting an application to this effect dated 05.09.2023, thereafter the appeal was fixed for hearing on 5 occasions, but no one has attended the hearing to prosecute the matter on behalf of the assessee. Under these circumstances, in absence of any prosecution on behalf of the assessee even after sufficient opportunities granted to represent, we are cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion before the Hon ble High Court of Bombay. Hon'ble High Court of Bombay dismissed the petition of the assessee. Therefore, the assessment proceedings started afresh, and assessment was completed in spite of non-compliance by the assessee. After the incriminating documents were found in search operations Shri Abhay Narendra Lodha had vide letter dt. 31/10/2012 submitted a letter of Surrender of undisclosed income u/s 132(4) of the Act in Topworth Group of cases to Dye Director of Income Tax (Investigation), Unit-I, Raipur wherein he had made voluntary admission of undisclosed income amounting to Rs. 250 Crores to cover the discrepancies arising out of material found and seized during the search and post search proceedings Shri P C Lodha, a Chartered Accountant and one of the key persons of the Group and uncle of Shri Abhay Lodha in his statement u/s 132(4) of the IT Act, 1961 dated 4.12.2012 confirmed on behalf of the group that he wished to make a voluntary disclosure of Rs. Two hundred and fifty Crores (Rs. 250 Crores) as unaccounted income of the group and would be paying due taxes as per law. However, the assessees of the Group failed to honour the surrender of undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ,vide his reply dated 05.11.2016 submitted his explanation in the matter of applicability of provisions of section 56(2)(vii) of the Act as detailed below: ...that the said provisions are applicable only in respect of transactions relating jo transfer of shares and not to allotment of shares . However as required the calculation of fair market value of shares as on the date of valuations under rule Il UA of the Income tax Rules, 1962 certified by independent Chartered Accountant obtained from the company are submitted herewith as ANNEXURE-I and ANNEXURE-1(a) respectively, only for the sake of compliance and it should not be construed either as admission or declaration of such value for taxation with following reservations:- (a) The provisions are not applicable to the assessee 's case as the transactions relate to allotment and not transfer. (b) Sec 56(2) begins with the word any property , The 2nd proviso to the said clause c 's which defines property includes share and securities. Hence for the purpose of applicability of the said provisions, the properly should be in existence. In the assessee 's case share , we would like to bring to your kind notice that as per c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head Income from other sources , namely: ---------------------------------------- (vii)--------- (viia) where a firm or a company not being a company in which the public are substantially interested, receives, in any previous year, from any person or persons, on or after the 1st day of June, 2010, any property, being shares of a company not being a company in which the public are substantially interested (i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property; (ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration: Provided that this clause shall not apply 10 any such property received by way of a transaction not regarded as transfer under clause (via) or clause (Vic) or clause (vicb) or clause (vid) or clause (vii) of section 47. Explanation. For the purposes of this clause, fair market value of a property, being shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, upon allotment of shares, the assessee has received shares and mere use of different terminologies or nomenclature for allotment and 'transfer' cannot alter the implications of Section 56(2) of the Act. As discussed above, from the submission of the assessee, the issue of share to the assessee is found as detailed below: A.Y. 2012-12 Share Issuing company Date of Issue Number of shares Allotted Type of Shares Face Value per share Premium per Share Issue Price per Share Book Value as on 31.03.2011 Differ Taxable Amount in hands of shareholder Akshata Mercantile Pvt Ltd 01.12,2011 2100000 Equity 10 o 10 1015 1015 2,13,15,00,000 Topworthpipes and tubes Pvt. Ltd. 3000000 Equity 10 30 40 47 2,10,00,000 Taxable Amount in the hand of share holder u/s 56(2)(viia): (A. Y. 2012-13) For investment in Akshata Mercantile Pvt Ltd Face value of each share=Rs. 10 Premium of each share=Rs. 0 Issue Price of each share=Face value + premium Rs. 10+ Rs. O Rs. 10 Book Value of each share=Rs. 1025 As the assessee has received each share at a price of Rs. 10/- , against the book value of share at Rs. 1025/- at the time of issue, therefore, it gained a profit of Rs. 1015/- (Rs. 1025-Rs. 10) per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llotment. However, the term property as defined in Explanation (d)(ii) above, doesn't makes distinction between the existing shares i.e. the shares already allotted by the company and those shares which are pending allotment. Therefore, contention of the assessee is irrelevant. The property comes into existence in the hands of the assessee as soon as the shares are allotted. Thus, the transaction attracts provisions of section 56(2)(vii). The addition of Rs. 2,15,25,00,000/- is hereby sustained. 7. Ld. CIT DR strongly supported the orders of the Ld. CIT(A), wherein the issue in hand has been dealt with on merits and deliberated at length, therefore, there is no unreasonableness in the order of Ld. CIT(A) and accordingly, the addition sustained by Ld. CIT(A) is requested to be upheld. 8. We have considered the submissions of the revenue and material available on record. In the present case, since the issues raised by the assessee before the Ld. CIT(A) have been decided on merits after considering and deliberating upon the facts and applicable provisions of law on the instant case. On perusal of the order of Ld. CIT(A), it is observed that proper working of the addition u/s 56(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. Apropos the claim of the Ld. AR that no incriminating documents/material was found and seized in the course of the search proceedings conducted u/s. 132 of the Act on 10.10.2012 on the assessee company, the same cannot be summarily accepted on the very face of it and would require to be vetted by the A.O. by referring to the seized record/material. 28. As stated by the assessee, and rightly so, there were justifiable reasons on its part for not filing the requisite details/documents, which have been filed before us as additional evidence, in the course of the proceedings before the CIT(AppeaIs). Also, it is a matter of fact borne from the record that the CIT(Appeals) had merely referred to the observations of the A.O. and disposed off the appeal by approving the same. We, thus, in the totality of the facts involved in the present case before us, read a/w. multi-facet contentions that have been raised by the assessee before us wherein adjudication of the majority of those would require a reference of the additional documentary evidence that the assessee has placed before us, restore the matter to the file of the CIT(Appeals) with a direction to him to re-adjudicate the same af ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
