CHALLENGE COMMODITIES PVT. LTD.,NEW DELHI V. ITO, NOIDA

ITA 2030/DEL/2017

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471623 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: RAKESH GUPTA; SOMIL AGARWAL
• Keywords: Unexplained expenditure; Fair market value
• Section: 143(3); 271(1)(c); 251; 56(2)(vii)(b)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’, NEW DELHI Before Sh. Satbeer Singh Godara, Judicial Member & Sh. Manish Agarwal, Accountant Member ITA No. 2030/Del/2017 : Asstt. Year: 2013-14 M/s Challenge Commodities Pvt. Ltd., C/o Prakash K. Prakash, B-1, Sagar Apartments, 6, Tilak Marg, New Delhi-110001 Vs Income Tax Officer, Ward-1(2), Noida (APPELLANT) (RESPONDENT) PAN No. AAECC8300J Assessee by : Dr. Rakesh Gupta, Adv. & Sh. Somil Agarwal, Adv. Revenue by : Sh. Rajesh Kumar Dhanesta, Sr. DR Date of Hearing: 27.02.2025 Date of Pronouncement: 27.02.2025 ORDER Per Satbeer Singh Godara, Judicial Member: This assessee’s appeal for Assessment Year 2013-14, arises against the CIT(A)-1, Noida’s in case No. 09/2016- 17/Noida, dated 17.03.2017, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”). 2. Heard both the parties at length. Case file perused. 3. The assessee pleads the following substantive grounds in the instant appeal: “1. That the ld. CIT(A) is erred under the law while treating share premium of Rs.62,50,000/- as income ITA No. 2030/Del/2017 Challenge Commodities Pvt. Ltd. 2 from other source of the appellant in view of provisions of section 56(2)(vii)(b) of the Act. 2. That the ld. CIT(A) is erred under the law while enhancing the income of the appellant by Rs.5,50,000/- as alleged unaccounted expenditure by exercising his power u/s 251(1)(a) r.w.s. 251(2) of the Act. 3. That the ld. CIT(A) is erred under the law while initiating penalty u/s 271(1)(c) of the Act for alleged furnishing inaccurate particulars of income and for alleged concealing the particulars of income.” 4. A perusal of the assessment discussion dated 15.03.2016 makes it clear at the outset that the learned Assessing Officer had questioned the assessee’s alleged extraordinary share premium of Rs.50 per unit as against face value of Rs.10/- each; for the purpose of making the addition herein u/s 56(2)(vii)(b) of the Act. We further note that instead of examining the justification of the assessee’s impugned share premium, the Assessing Officer invoked case law CIT Vs. Durga Prasad More 82 ITR 540, M/s Mcdowell & Co. 154 ITR 148 and Sunil Siddarth Vs. CIT 156 ITR 507 that such a question of genuineness could indeed be examined in an instance involving higher share premium. 5. We have given our thoughtful consideration to the Revenue’s vehement contentions supporting the impugned addition. We make it clear that the impugned statutory provision admittedly comes into play in specified circumstances ITA No. 2030/Del/2017 Challenge Commodities Pvt. Ltd. 3 than that involving genuineness of any amount credited or received as the later situation invites addition u/s 68 of the Act. No addition has admittedly been made u/s 68 herein. This is indeed coupled with the fact that the legislature has provided for fair market value in accordance with the corresponding twin methods u/s 56(2)(vii) explanation (b) which has not been invoked in the instant case. We thus see no merit in the impugned addition made by both the lower authorities which is directed to be deleted in very terms. The assessee succeeds in it’s instant first and foremost substantive ground therefore. 6. Next comes the enhancement issue of Rs.5,50,000/- made in the lower appellate proceedings which nowhere formed subject matter of any disallowance or addition in the Assessing Officer’s assessment. That being the case, we hereby quote CIT vs. Shapoorji Pallonji Mistry (1962) 44 ITR 891 (SC), CIT vs. Sardari Lal & Co. (2001) 251 ITR 864(Del.) and CIT vs. Union Tyres (1999) 240 ITR 556(Del) to conclude that such an enhancement is not sustainable in law since involving altogether a new head of income. Deleted accordingly. ITA No. 2030/Del/2017 Challenge Commodities Pvt. Ltd. 4 7. This assessee’s appeal is allowed in above terms. Order Pronounced in the Open Court on 27/02/2025. Sd/- Sd/- (Manish Agarwal) (Satbeer Singh Godara) Accountant Member Judicial Member Dated: 27/02/2025 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR "