9911796707
TMI Blog2024 (10) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus there is no question of inadequate enquiry made by the AO during the assessment proceedings. PCIT misconstrued the provisions of section 56(2)(viib) namely if a company not being a company in which public are substantially interested, received any consideration against issuance of shares and the consideration so received exceeds the face value of such shares, the difference between the aggregate consideration received and the fair market value of the shares becomes taxable in the hands of such company. PCIT failed to note that the assessee company is not a Public Ltd company and the shares were allotted only on the face value of Rs. 10/- without any premium, therefore the provisions of section 56(2)(viib) of the Act does not arise in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that period of limitation expired during the period from 15-03- 2020 till 28-02-2022 were extended with a limitation of 90 days from 01-03-2022. Applying the above ratio of the judgement, the delay is to be only 44 days and therefore requested to condone the delay. The ld. CIT-DR has no serious objection in condoning the delay, thus, the delay in filing the above appeal is hereby condoned considering Covid-19 Pandamic period and the appeal is taken up for hearing. 3. Brief facts of the case are that the assessee company filed its Return of Income for assessment year 2015-16 claiming total loss of Rs. 23,02,232/-. The return was taken for limited scrutiny assessment and after calling for various details by the AO by issuing Notices u/s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lub Pvt. Ltd. into equity by issuing 4,15,00,200 shares to Ms Country Club Hospitability and Holidays Ltd. However on examination of the balance sheet, it appears that no such loan was appearing in the books as on 31-03-2014. This fact was not examined by the Assessing Officer while passing the assessment order, which is erroneous and prejudicial to the interest of the Revenue. Therefore, a show cause notice was issued to the assessee why not to revise the assessment order passed by the Assessing Officer. The assessee failed to response to the show cause notice therefore opportunities of hearing given on 13-03-2020, 20-03-2020 and final show cause notice on 21-04-2020. However, the assessee sought for an adjournment and not filed any detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served by the Assessing Officer vide para no.2 of the assessment order. 7. Without prejudice to other grounds, the Ld. Pr. CIT ought to have appreciated that the Assessing Officer collected the relevant material and discussed the impugned issues with the assessee's CA. before making the assessment and that therefore, there is no valid basis for the Pr. CIT to exercise jurisdiction u/s 263 of the Act and to direct the Assessing Officer to pass a fresh assessment order. 8. Without prejudice to other grounds, the Ld. Pr. CII ought to have appreciated that the Assessing Officer had made reasonable and requisite enquiries on the issues raised by the Pr. CIT during the proceedings u/s 263 of the Act and that no order under 263 of the Act coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsidiary company of public listed companies are not considered to be privately held or closely held company (even though they themselves are not publicly trader). Thus, whole fact which goes to the root of the matter is being ignored by the Ld. PCIT and the invocation of Revision proceedings has no base. Further, the assessee company has issued 4,15,00,200 of shares at face value of Rs. 10 each to M/s.CCHHL without any premium. Thus, provisions of section 56(2)(vii) are also not applicable for the transaction between the holding and subsidiary company. Therefore, the entire Revision proceedings is liable to be quashed. 6. Per contra, ld. CIT appearing for the Revenue supported the order passed by ld. PCIT and requested to uphold the same. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res between the holding and subsidiary companies at a face value of Rs. 10 and without there being any premium accepted the returned income. Thus the Ld AO made necessary enquiry before passing the assessment order. Thus there is no question of inadequate enquiry made by the AO during the assessment proceedings. 8. In our considered view the Ld PCIT misconstrued the provisions of section 56(2)(viib) of the Act, namely if a company not being a company in which public are substantially interested, received any consideration against issuance of shares and the consideration so received exceeds the face value of such shares, the difference between the aggregate consideration received and the fair market value of the shares becomes taxable in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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