M/s Vishwa Calibre Builders Pvt. Ltd., Patiala V. Pr. CIT, , Patiala

ITA 1248/CHANDI/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1279 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-03-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 21-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K GARG
• Keywords: Revision of order
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 1248/CHD/2017 ASSESSMENT YEAR : 2014-15 M/S VISHWA CALIBRE BUILDERS PVT. LTD., VS. THE PR. CIT, 16-C, BANK COLONY, AAYAKAR BHAWAN, PATIALA PATIALA PAN NO. AAACV6041M (APPELLANT) (RESPONDENT) APPELLANT BY : SH. T.N. SINGLA, CA RESPONDENT BY : SH. J.K. GARG, CIT-DR DATE OF HEARING : 01.8.2018 DATE OF PRONOUNCEMENT : 02.09.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 26.07.2017 OF THE PRINCIPAL COMMIS SIONER OF INCOME TAX(A), PATIALA [HEREINAFTER REFERRED TO AS PCIT ] AGITATING THE ACTION OF THE PCIT IN PASSING THE IMPUGNED ORDER U/S 263 OF THE I.T. ACT EXERCISING HIS REVISION JURISDICTION 2. THE BRIEF FACTS OF THE CASE ARE THAT THE LD. PCI T NOTICED THAT THE ASSESSEE DURING THE YEAR HAD ALLOTTED CERTAIN S HARES ON PREMIUM TO CERTAIN PARTIES. HE FOUND THAT THE ASSESSING OFF ICER HAD NOT MADE ADEQUATE ENQUIRIES AS TO THE GENUINENESS OF THE TRA NSACTIONS AND AS TO WHY THE SHARES HAVE BEEN ALLOTTED BY THE ASSESSEE A T A PREMIUM. HE ITA NO. 1248/CHD/2017- M/S VISHWA CALIBRE BUILDERS PVT LTD., PATIALA 2 THEREFORE, HELD THAT THE ORDER OF THE ASSESSING OFF ICER WAS ERRONEOUS SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REV ENUE. HE ACCORDINGLY SET ASIDE THE ORDER OF THE ASSESSING OF FICER AND REMANDED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICE R FOR PASSING A FRESH ASSESSMENT ORDER IN RESPECT TO THE SAID ISSUE. 3. BEING AGGRIEVED BY THE ABOVE ACTION OF THE CIT(A ) THE ASSESSEE HAS COME IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE RELEVANT RECORD / FACTS OF THE CASE AND HAS STA TED THAT IN THE YEAR UNDER CONSIDERATION THE ASSESSEE DID NOT RECEIVE AN Y SHARE APPLICATION MONEY OR INTRODUCED FUNDS FOR THE ALLOT MENT OF SHARES. THAT THE FUNDS WERE RECEIVED LONG BACK IN THE ASSES SMENT YEARS 2007- 08 AND 2008-09 AND THE SAME WERE ON ACCOUNT OF ADVA NCES FROM CUSTOMERS. HOWEVER, IN THE YEAR UNDER CONSIDERATIO N, THE ASSESSEE HAD ALLOTTED SHARES AGAINST THE SAID ADVANCES OF EA RLIER YEARS. IN VIEW OF THIS, A SPECIFIC QUESTION WAS ASKED TO THE LD. DR THAT IF THE ASSESSEE HAD ISSUED SHARES EVEN ON PREMIUM AGAINST THE ADVANCES OUTSTANDING IN THE EARLIER YEARS THAT TOO LONG BACK IN THE YEARS 2007- 08 AND 2008-09 AND THE REVENUE HAS NEVER DOUBTED AB OUT THE LIABILITY OF THE ASSESSEE IN THAT RESPECT IN ANY O F THE SUBSEQUENT YEARS AND HOW THE ALLOTMENT OF SHARES IN THIS YEAR WILL HAVE CAUSED ANY LOSS TO THE REVENUE OR HOW THE SAID ALLOTMENT CAN BE SEEN AS AN ATTEMPT ON THE PART OF THE ASSESSEE TO AVOID TAXES SO FAR AS THE YEAR UNDER CONSIDERATION WAS CONCERNED. ITA NO. 1248/CHD/2017- M/S VISHWA CALIBRE BUILDERS PVT LTD., PATIALA 3 5. THE LD. DR COULD NOT GIVE ANY SATISFACTORY REPLY IN THIS RESPECT EXCEPT TO SAY THAT THE ALLOTMENT OF THE SHARES IN T HIS YEAR IS A SHAM TRANSACTION AND THAT, IN FACT, THE ASSESSEE HAS FOR FEITED / DISCHARGED THE LIABILITY WHICH AMOUNT TO CESSATION OF THE LIAB ILITY. 6. WE ARE NOT IN AGREEMENT WITH THE ABOVE CONTENTIO N OF THE LD. DR. EVEN AFTER ALLOTMENT OF SHARES THE SAID SHAR EHOLDERS HAVE A CHARGE ON THE PROPERTY OF THE ASSESSEE COMPANY. TH E REVENUE COULD NOT PROVE THAT UNDER THE CIRCUMSTANCES, THE AFORESA ID TRANSACTION HAS RESULTED IN ESCAPEMENT OF ANY ASSESSMENT OF INCOME OF THE ASSESSEE. UNDER THE CIRCUMSTANCES, THE ORDER OF THE ASSESSING OFFICER CANNOT BE SAID TO BE PREJUDICIAL TO THE INTEREST OF REVENUE ON THIS ISSUE. 7. WE THEREFORE, DO NOT FIND ANY MERIT IN THE ORDER OF THE LD. PCIT IN INVOKING THE PROVISIONS OF SECTION 263 OF T HE ACT. THE IMPUGNED ORDER PASSED BY THE LD. PCIT U/S 263 OF THE ACT IS HEREBY QUASHED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HEREB Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.09.2018 SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07.09.2018 RKK COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR