ITO, Ward-10(4), Kolkata, Kolkata V. Ms Savera Towers Pvt. Ltd., Kolkata

ITA 2275/KOL/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0151 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Assessee Lawyers: MANISH TIWARI
• Keywords: Unexplained cash credit; Source of fund; Retrospective amendment; Question of law; Fair market value; Capital receipt
• Section: 143(3); 260A; 133(6); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI A T VARKEY, JM, & SHRI M.BAL AGANESH, AM] I.T.A NO. 2275/KOL/20 16 ASSESSMENT YEAR : 2012-1 3 ITO, WARD-10(4), KOLKATA -VS- M/S SAVERA TOWER S PVT. LTD. [PAN: AAOCS 9744 C ] (APPELLANT) (RESP ONDENT) FOR THE APPELLANT : SHRI SAURABH KUMAR , ADDL. CIT SR. DR FOR THE RESPONDENT : SHRI MANISH TIWARI, AR DATE OF HEARING : 28.11.2018 DATE OF PRONOUNCEMENT : 05.12.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-4, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO. CIT(A), KOLKATA-4/10381/15-16 DATED 30.09.2016 AGAINST THE ORDER PASSED BY THE ITO, WARD- 10(4), KOLKATA [ IN SHORT THE LD AO] UNDER SECTIO N 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 12.03.2015 FOR THE ASS ESSMENT YEAR 2012-13. 2. THE ONLY EFFECTIVE ISSUE TO BE DECIDED IN THIS A PPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE TOWARDS SHARE PREMIUM IN THE SUM OF RS. 2,70,45,800/-, IN THE FACTS AND CIRCUMSTANCES OF TH E CASE. 2 ITA NO.2275/KOL/2016 M/S SAVERA TOWERS PVT. LTD. A.YR. 2012-13 2 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE COMPANY RAISED SHARE CAPITAL AND SHARE PREMIUM DURING THE YEAR UNDER APPEAL. THE LD. AO OBSERVED THAT SINCE THERE WAS NO SUBSTANTIAL BUSINESS ACTIVITY CARRIED ON BY THE ASSESSEE, THE ASSESSEE COMPANY CANNOT COMMAND HUGE SHARE PREMIUM. ACCORDINGLY HE SOUGHT T O VERIFY THE VERACITY OF THE SHARE CAPITAL AND SHARE PREMIUM RAISED BY THE ASSES SEE. THE ASSESSEE SUBMITTED THAT IT IS ENGAGED IN THE BUSINESS OF INVESTMENT IN SHARES OF LIMITED COMPANIES. THE ASSESSEE RAISED SHARE CAPITAL AND SHARE PREMIUM FROM 4 CORP ORATE ENTITIES AS UNDER:- AMANAT VENTURES P LTD RS 18,00,000/- BHAGWATI NIRMAN P LTD RS 1,58,00,000/- HAPPY BAGANS P LTD RS 80,00,000/- SUBHPHAL SUPPLIERS P LTD RS 15,00,000/- TOTAL RS 2,71,00,000/- OUT OF TOTAL SUM OF RS. 2,71,00,000/- A SUM OF RS. 54,200/- WAS ATTRIBUTED TOWARDS SHARE CAPITAL AND REMAINING SUM OF RS. 2,70,45,800/- WAS ATTRIBUTED TOWARDS SHARE PREMIUM. NOTICE U/S 133(6) OF THE ACT WERE ISSUED TO ALL THE SHARE HOLDERS WHICH WERE DULY REPLIED BY THEM DIRECTLY BEFORE THE LD. AO. THE LD. AO OBSE RVED THAT REPLY SENT BY THE SHARE HOLDERS WERE ALMOST IDENTICAL IN STYLE AND SUBMITTE D ALMOST AT THE SAME POINT OF TIME. EVEN ADDRESS OF THE REGISTERED OFFICE OF SOME OF TH E COMPANIES WERE SAME WITH COMMON DIRECTORS. ACCORDINGLY, THE LD. AO ALLEGED ON THE C ONNIVANCE OF THE ASSESSEE WITH THE SHAREHOLDER COMPANIES. THE SUMMONS U/S 131 OF THE A CT WAS ISSUED TO THE DIRECTORS OF THE ASSESSEE COMPANY TO EXAMINE THE RECEIPT OF PREM IUM AND THE ASSESSEE WAS ALSO DIRECTED TO PRODUCE THE DIRECTORS OF THE SHARE HOLD ER COMPANIES FOR EXAMINATION OF IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWOR THINESS OF THE INVESTORS. THE LD. AO OBSERVED THAT THE SUMMONS ISSUED U/S 131 OF THE ACT REMAINED PARTIALLY COMPLIED AND THE ASSESSEE DID NOT PRODUCE THE DIRECTORS OF THE I NVESTOR COMPANIES BEFORE THE LD AO. FOR NON-COMPLIANCE OF THE SUMMONS U/S 131 OF THE AC T IN PART, BY NOT PRODUCING THE DIRECTORS OF THE SHARE HOLDER COMPANIES, THE LD. AO CONCLUDED THAT THE SHARE PREMIUM 3 ITA NO.2275/KOL/2016 M/S SAVERA TOWERS PVT. LTD. A.YR. 2012-13 3 RAISED BY THE ASSESSEE IN THE SUM OF RS. 2,70,45,80 0/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. THE LD. AO HOWEVER ACCEPTED THE RECEIPT OF SHARE CAPITAL IN THE SUM OF RS. 54,200/- FROM THE VERY SAME SHAREHOLDERS AS GENUINE IN THE ASSESSMENT. 4. THE ASSESSEE PLEADED BEFORE THE LD. CIT(A) THAT IT HAD FURNISHED VARIOUS DOCUMENTARY EVIDENCES SUBSTANTIATING THE SHARE CAPITAL ALONG WI TH SHARE PREMIUM. THE DOCUMENTS SO FURNISHED INTER ALIA INCLUDED COPIES OF INCOME TAX RETURN ACKNOWLEDGEMENT OF SHAREHOLDERS, THE STATEMENT OF SOURCE OF FUNDS, AUD ITED FINANCIAL STATEMENTS, COPIES OF RELEVANT BANK STATEMENTS IN RESPECT OF ACCOUNTS FRO M WHICH SHARE APPLICATION MONIES WERE PAID , PAN, ADDRESS OF SHARE SUBSCRIBERS FOR T HE YEAR ENDED 31.03.2012. THE ASSESSEE ALSO FURNISHED A COPY OF RETURN FILED, ALL OTMENT OF SHARES IN FORM NO. 2 FILED WITH ROC. THE ASSESSEE FILED CERTIFICATE OF INCORPO RATION OF ALL THE SHAREHOLDERS COMPANIES TOGETHER WITH SHARE ALLOTMENT LETTERS ISS UED TO THEM. THE ASSESSEE ALSO SUBMITTED EACH OF THE ASSESSEE SUBSCRIBER COMPANY W AS REGULARLY ASSESSED TO INCOME TAX AND THE PAYMENTS TOWARDS SHARE CAPITAL AND SHARE PR EMIUM AMOUNTS WERE MADE BY THEM TO THE ASSESSEE THROUGH THEIR RESPECTIVE BANK ACCOU NTS. IT WAS ALSO SUBMITTED THAT THE NOTICE ISSUED U/S 133(6) OF THE ACT TO THE SHARE SU BSCRIBERS INDEPENDENTLY WERE DULY COMPLIED WITH BY THEM BEFORE THE LD. AO. EVEN THE D ETAILS CALLED FOR U/S 131 OF THE ACT WERE ALSO COMPLIED WITH BY THE ASSESSEE. IT WAS ALS O SUBMITTED THAT FROM THE PERUSAL OF THE BANK STATEMENT, IT COULD BE SEEN THAT THERE WER E NO CASH DEPOSITS MADE PRIOR TO THE ISSUE OF CHEQUES TO THE ASSESSEE COMPANY. IT WAS PL EADED THAT APART FROM THE AFORESAID DOCUMENTS, CONFIRMATIONS TOGETHER WITH EXPLANATION WITH REGARD TO IMMEDIATE SOURCE OF PAYMENT OF SHARE APPLICATION MONIES WERE ALSO FURNI SHED BEFORE THE LD. AO. IT WAS PLEADED THAT THE ASSESSEE ALSO PLACED ON RECORD THE FOLLOWING DETAILS OF INVESTIBLE FUNDS AVAILABLE WITH THE SHARE SUBSCRIBER COMPANIES TO MA KE THE INVESTMENT IN THE ASSESSEE COMPANY. 4 ITA NO.2275/KOL/2016 M/S SAVERA TOWERS PVT. LTD. A.YR. 2012-13 4 NAME OF THE COMPANY INVESTIBLE FUNDS AVAILABLE AS PER FINANCIALS AMOUNT INVESTED IN THE APPELLANT COMPANY AMANAT VENTURES (P) LTD. 26,95,60,993/- 18,00,000/- BHAGWATI NIRMAN (P) LTD. 1,26,33,281/- 1,58,00,000/ - HAPPY BAGANS (P) LTD. 37,55,20,051/- 80,00,000/- SUBHPHAL SUPPLIERS (P) LTD. 25,78,62,327/- 15,00,00 0/- 2,71,00,000/- 4.1. IT WAS SUBMITTED THAT FROM THE AFORESAID DOCUM ENTS AND EVIDENCES, THE IDENTITY AND CREDITWORTHINESS OF THE SHARE SUBSCRIBERS STAND CON CLUSIVELY PROVED TOGETHER WITH THE GENUINENESS OF THE TRANSACTION. IT WAS SUBMITTED TH AT THE SHARE SUBSCRIBERS HAD EVEN ESTABLISHED THE SOURCE OF SOURCE OF FUNDS IN THE IN STANT CASE. NO LACUNA, INFIRMITY, FALSITY OR DEFECT WAS ESTABLISHED OR PROVED IN THE EVIDENC ES PLACED ON RECORD NOR WAS THE LD. AO ABLE TO PROVE ANY FALSITY IN THE EXPLANATION FUR NISHED BY THE SHARE APPLICANTS IN RESPECT OF SOURCE AND/OR THE SOURCE OF SOURCE OF IN VESTMENTS. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF VARIOUS HIGH COURTS INC LUDING HONBLE JURISDICTIONAL HIGH COURT IN SUPPORT OF ITS CONTENTIONS. THE ASSESSEE S PECIFICALLY ARGUED BEFORE THE LD. CIT(A) THAT THE ALLOTMENT OF SHARES AT A PREMIUM CA NNOT BE CONSIDERED AS SHAM OR INCOME OF THE ASSESSEE. IT WAS PLEADED AT A PRELIMI NARY LEVEL THAT THE RECEIPT OF SHARE CAPITAL AND SHARE PREMIUM IS ON CAPITAL ACCOUNT AND THAT THE SAME CANNOT BE SUBJECT TO TAX AS INCOME. SPECIFIC SUBMISSIONS WERE ALSO MADE IN THE CONTEXT OF INTRODUCTION OF SECTION 56(2)(VIIB) INSERTED BY THE FINANCE ACT, 20 12 WITH EFFECT FROM 01.04.2013 WHICH READS AS UNDER: [(VIIB) WHERE A COMPANY, NOT BEING A COMPANY IN W HICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED, RECEIVES, IN ANY PREVIOUS YEAR, FROM AN Y PERSON BEING A RESIDENT, ANY CONSIDERATION FOR ISSUE OF SHARES THAT EXCEEDS THE FACE VALUE OF SUCH SHARES, THE AGGREGATE CONSIDERATION RECEIVED FOR SUCH SHARES AS EXCEEDS THE FAIR MARKET VALUE OF THE SHARES: 5 ITA NO.2275/KOL/2016 M/S SAVERA TOWERS PVT. LTD. A.YR. 2012-13 5 PROVIDED THAT THIS CLAUSE SHALL NOT APPLY WHERE THE CONSIDERATION FOR ISSUE OF SHARES IS RECEIVED (I) BY A VENTURE CAPITAL UNDERTAKING FROM A VENTUR E CAPITAL COMPANY OR A VENTURE CAPITAL FUND; OR (II) BY A COMPANY FROM A CLASS OR CLASSES OF PERSON S AS MAY BE NOTIFIED BY THE CENTRAL GOVERNMENT IN THIS BEHALF. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, (A) THE FAIR MARKET VALUE OF THE SHARES SHALL BE T HE VALUE (I) AS MAY BE DETERMINED IN ACCORDANCE WITH SUCH M ETHOD AS MAY BE PRESCRIBED; OR (II) AS MAY BE SUBSTANTIATED BY THE COMPANY TO THE SATISFACTION OF THE ASSESSING OFFICER, BASED ON THE VALUE, ON THE DATE OF ISSUE OF SHARES, OF ITS ASSETS, INCLUDING INTANGIBLE ASSETS BEING GOODWILL, KNOW-HOW, PATENTS, COPYRIGHT S, TRADEMARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMIL AR NATURE, WHICHEVER IS HIGHER; (B) VENTURE CAPITAL COMPANY, VENTURE CAPITAL FUN D AND VENTURE CAPITAL UNDERTAKING SHALL HAVE THE MEANINGS RESPECTIVELY A SSIGNED TO THEM IN CLAUSE (A), CLAUSE (B) AND CLAUSE (C) OF EXPLANATION TO CLAUSE (23FB) OF SECTION 10]; 4.2. IT WAS PLEADED THAT THE AFORESAID PROVISIONS C ANNOT BE MADE APPLICABLE FOR THE YEAR UNDER APPEAL. ACCORDINGLY, IT WAS ARGUED THAT THE I SSUANCE OF SHARES OF PREMIUM CANNOT BE BROUGHT TO TAX UNDER ANY SECTION OF THE INCOME T AX ACT UP TO ASSESSMENT YEAR 2012- 13. SUBMISSIONS WERE ALSO MADE WITH SPECIFIC REFERE NCE TO A PROVISO INSERTED BY THE FINANCE ACT, 2012 W.E.F. 01.04.2013 IN SECTION 68 W HICH READS AS UNDER: [PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY ( N OT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED), AND THE SUM SO CREDI TED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, ANY EXPLANATION OFFERED BY SUCH ASSESSEE-COMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS (A) THE PERSON, BEING A RESIDENT IN WHOSE NAME SUCH CRE DIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALSO OFFERS AN EXPLANATION AB OUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITED; AND (B) SUCH EXPLANATION IN THE OPINION OF THE ASSESSING OF FICER AFORESAID HAS BEEN FOUND TO BE SATISFACTORY: 6 ITA NO.2275/KOL/2016 M/S SAVERA TOWERS PVT. LTD. A.YR. 2012-13 6 5. THE LD. CIT(A) OBSERVED THAT THE LD. AO HAD ADJU DICATED THE ISSUE WITH A PRE- DETERMINED STATE OF MIND THAT THE SHARE PREMIUM REC EIVED BY THE ASSESSEE IS NOT GENUINE. HE ALSO OBSERVED THAT THE LD. AO HELD THAT THE SHAREHOLDERS DID NOT EXIST AND THE TRANSACTIONS WERE ACCORDINGLY AN EYE WASH ONLY FOR BRINGING THE BLACK MONEY OF THE ASSESSEE ONLY INTO THE COMPANY IN THE GARB OF SHARE CAPITAL AND SHARE PREMIUM. THE LD. CIT(A) GAVE A CATEGORICAL FINDING THAT EACH OF THE SHARE SUBSCRIBERS ARE REGULARLY ASSESSED TO INCOME TAX AND THAT THE INVESTMENTS MAD E BY EACH OF THEM WERE DULY AND FULLY REFLECTED IN THEIR AUDITED BOOKS OF ACCOUNTS AS WELL AS IN THEIR INCOME TAX RETURNS WHICH ARE PART OF THE PAPER BOOK. THE NOTICES U/S 1 33(6) OF THE ACT ISSUED BY THE LD. AO TO EACH OF THE SHARE SUBSCRIBERS ALSO STOOD DULY CO MPLIED WITH. HE HELD THAT EACH OF THE SHARE APPLICANTS MAINTAINED BANK STATEMENT WHICH AR E PART OF THE PAPER BOOK, FROM WHERE, IT IS EVIDENT THAT ALL THE TRANSACTIONS WERE ROUTED THROUGH PROPER BANKING CHANNELS AND DULY REFLECTED IN THEIR RESPECTIVE BOO KS OF ACCOUNTS WHICH PROVES THE GENUINENESS OF THE TRANSACTION BEYOND DOUBT. HE ALS O OBSERVED THAT ALL THE SHARE APPLICANTS EXPLAINED THEIR RESPECTIVE SOURCE OF FUN DS IN THEIR REPLIES TO 133(6) NOTICE DIRECTLY BEFORE THE LD. AO AND THAT THE NET WORTH O F EACH OF THE SHARE SUBSCRIBERS ARE FAR HIGHER THAN THE AMOUNT OF INVESTMENTS MADE BY THEM IN THE ASSESSEE COMPANY, WHICH CLEARLY PROVED THE CREDITWORTHINESS OF THE SHARE SU BSCRIBERS TO MAKE INVESTMENTS IN THE ASSESSEE COMPANY. HE HELD THAT THE VERY FACT THAT N OTICES U/S 133(6) WERE DULY SERVED ON THE RESPECTIVE SHARE SUBSCRIBERS AND THAT THEY WERE DULY REPLIED WITH BY THEM DIRECTLY BEFORE THE LD. AO, PROVES THEIR IDENTITY BEYOND DOU BT. HENCE, HE HELD THAT ALL THE THREE INGREDIENTS OF SECTION 68 NAMELY THE IDENTITY OF TH E SHARE SUBSCRIBERS, CREDITWORTHINESS OF THE SHARE SUBSCRIBERS AND GENUINENESS OF THE TRA NSACTION WERE PROVED IN THE INSTANT CASE BY THE ASSESSEE. 5.1. HE ALSO HELD THAT THE PROVISION OF SECTION 56( 2)(VIIB) OF THE ACT IS APPLICABLE ONLY FROM ASSESSMENT YEAR 2013-14 AND THE SAME CANNOT BE MADE APPLICABLE FOR EARLIER ASSESSMENT YEAR. THE LD. CIT(A) GAVE A CATEGORICAL FINDING THAT THE LD. AO HAD NOT 7 ITA NO.2275/KOL/2016 M/S SAVERA TOWERS PVT. LTD. A.YR. 2012-13 7 DOUBTED THE IDENTITY AND CREDITWORTHINESS OF THE SH ARE SUBSCRIBERS AND THE GENUINENESS OF THE TRANSACTIONS IN RESPECT OF RECEIPT OF SHARE CAPITAL IN THE SUM OF RS. 54,200/-. WHILE THAT IS SO, HOW CAN THE SAME BE DOUBTED FOR T HE PURPOSE OF RECEIPT OF SHARE PREMIUM ALONE. ACCORDINGLY HE DELETED THE ADDITION MADE ON ACCOUNT OF SHARE PREMIUM TO THE TUNE OF RS. 2,70,45,800 /- FOR THE YEAR UNDE R APPEAL. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE FACTS S TATED HEREINABOVE REMAIN UNDISPUTED BEFORE US BY EITHER OF THE PARTIES AND HENCE THE SA ME ARE NOT REITERATED FOR THE SAKE OF BREVITY. AT THE OUTSET, WE FIND THAT THE ASSESSEE H AD RECEIVED SHARE CAPITAL OF RS. 54,200/- FROM 4 CORPORATE ENTITIES AND RS. 2,70,45, 800/- FROM THE VERY SAME SHAREHOLDERS TOWARDS SHARE PREMIUM. THE SHARE CAPI TAL RECEIVED BY THE ASSESSEE HAS BEEN DULY ACCEPTED BY THE LD. AO WITHIN THE KEN OF SECTION 68 OF THE ACT. HOWEVER, SHARE PREMIUM COMPONENT HAS BEEN DOUBTED BY THE LD. AO. WE FIND THAT THE ASSESSEE IN THE INSTANT CASE HAD DULY COMPLIED WITH BY FURNISHI NG THE COMPLETE DETAILS OF SHARE SUBSCRIBERS TO PROVE THEIR IDENTITY, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF SHARE SUBSCRIBERS BEYOND DOUBT. THESE ARE DULY S UPPORTED BY THE DOCUMENTARY EVIDENCES WHICH ARE ENCLOSED IN THE PAPER BOOK. THE LD. AO HAD NOT FOUND ANY FALSITY OR ANY ADVERSE INFERENCE OF THE SAID DOCUMENTS. WE FIN D THAT THE LD. CIT(A) HAD PLACED HEAVY RELIANCE ON THESE DOCUMENTS AND HAD GRANTED R ELIEF TO THE ASSESSEE. ALL THE SHARE SUBSCRIBERS ARE DULY ASSESSED TO INCOME TAX AND THE TRANSACTION WITH THE ASSESSEE COMPANY ARE DULY ROUTED THROUGH BANKING CHANNELS AN D ARE DULY REFLECTED IN THEIR RESPECTIVE AUDITED BALANCE SHEETS WHICH ARE ALSO PL ACED ON RECORD BEFORE US. IN ANY CASE, ONCE THE RECEIPT OF SHARE CAPITAL HAS BEEN ACCEPTED AS GENUINE WITHIN THE KEN OF SECTION 68 OF THE ACT, THERE IS NO REASON FOR THE LD. AO TO DOUBT THE SHARE PREMIUM COMPONENT RECEIVED FROM THE VERY SAME SHAREHOLDERS AS BOGUS. WE HELD THAT ALL THE THREE NECESSARY INGREDIENTS OF SECTION 68 HAD BEEN DULY COMPLIED WI TH BY THE ASSESSEE WITH PROPER DOCUMENTARY EVIDENCES. WE FIND THAT NOTICES ISSUED U/S 133(6) HAVE BEEN DULY COMPLIED 8 ITA NO.2275/KOL/2016 M/S SAVERA TOWERS PVT. LTD. A.YR. 2012-13 8 WITH. THE ONLY GRIEVANCE OF THE LD. AO WAS THAT THE ASSESSEE COULD NOT PRODUCE THE DIRECTORS OF THE SHARE SUBSCRIBING COMPANIES. IN OU R CONSIDERED OPINION, FOR THIS REASON ALONE, THERE CANNOT BE ANY ADDITION U/S 68 OF THE A CT AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION PVT . LTD. REPORTED IN 159 ITR 78 (SC). WE FIND THAT THE DECISION OF HONBLE DELHI HIGH COU RT IN THE CASE OF NOVO PROMOTERS AND FINELEASE PVT. LTD. REPORTED IN 342 ITR 169 (DE L) VEHEMENTLY RELIED UPON BY THE LD. DR BEFORE US, IS NOT APPLICABLE IN THE INSTANT CASE , AS IN THE FACTS BEFORE THE HONBLE DELHI HIGH COURT, THE NOTICES U/S 133(6) HAVE NOT B EEN DULY COMPLIED WITH. HENCE THE DECISION RENDERED BY THE HONBLE DELHI HIGH COURT I N THE CASE REFERRED TO SUPRA IS NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE AND IS FACTUALLY DISTINGHUISHABLE.. 6.1. WE FIND THAT THE RELIANCE PLACED BY THE LD. AR IN THE DECISION OF HONBLE BOMBAY HIGH COURT IN PR. CIT VS. APEAK INFOTECH REPORTED I N 88 TAXMANN.COM 695 DT 08.06.2017 WHEREIN THE QUESTION RAISED BEFORE THE H ONBLE BOMBAY HIGH COURT ARE AS UNDER: A. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE TRIBUNAL WAS CORRECT TO UPHOLD THE DECISION ON COMMISSIONER OF I NCOME TAX (APPEALS) THAT THE SHARE PREMIUM RECEIVED BY THE ASSESSEE-COMPANY CANNOT BE TAXED UNDER SECTION 68 OF THE ACT IGNORING THE RATIO LAID DOWN BY THIS COURT IN ITS D ECISION REPORTED IN THE CASE OF MAJOR METALS LTD. VS. UNION OF INDIA [2013] 359 ITR 450 ( BOM)? B. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE TRIBUNAL AS WELL AS THE COMMISSIONER OF INCOME TAX (APPEALS) WAS RIG HT IN DELETING ADDITION MADE BY THE ASSESSING OFFICER, BY HOLDING THAT THE SHARE PR EMIUM RECEIPT IS CAPITAL IN NATURE? THE HONBLE COURT HELD AS UNDER: REGARDING QUESTION A : (A) THE ISSUE RAISED BY THE REVENUE IN THIS QUESTION IS TO BRING TO TAX THE SHARE PREMIUM RECEIVED UNDER SECTION 68 OF THE ACT. WE FIND THAT THE ISSUE OF BRINGING THE SHARE PREMIUM TO TAX UNDER SECTION 68 OF THE ACT WAS NOT AN ISSUE WHICH WAS URGED BY THE APPE LLANT REVENUE BEFORE THE TRIBUNAL. THE ONLY ISSUE W HICH WAS URGED BEFORE THE TRIBUNAL AS RECORDED IN PARA 11 OF THE IMPUGNED ORD ER IS THE ADDITION OF SHARE CAPITAL AND SHARE APPLICATION MONEY IN THE HANDS OF THE ASS ESSEE AS INCOME UNDER SECTION 28(IV) OF THE ACT. WE FIND THAT THE COMMISSIONER OF INCOME- TAX (APPEALS) DID CONSIDER THE ISSUE OF APPLICABILITY OF SECTION 68 OF THE ACT AND CONCLUDED THAT IT DOES NOT APPLY. 9 ITA NO.2275/KOL/2016 M/S SAVERA TOWERS PVT. LTD. A.YR. 2012-13 9 THE REVENUE SEEMS TO HAVE ACCEPTED THE SAME AND DID NOT URGE THIS ISSUE BEFORE THE TRIBUNAL . MR. BHOOT, LEARNED COUNSEL APPEARING FOR THE REVE NUE ALSO FAIRLY STATES THAT THE ISSUE OF APPLICABILITY OF SECTION 68 OF THE ACT WAS NOT URGED BY THE REVENUE BEFORE THE TRIBUNAL. (B) IT IS A SETTLED POSITION IN LAW AS HELD BY THIS C OURT IN CIT V. TATA CHEMICALS LTD . [2002] 122 TAXMAN 643/256 ITR 395 (BOM.) THAT IN AN APPEAL UNDER SECTION 260A OF THE ACT, THE HIGH COURT CAN ONLY DECIDE A QUESTION IF IT HAD BEEN RAISED BEFORE THE TRIBUNAL EVEN IF NOT DETERMINED BY THE TRIBUNAL. THEREFORE, NO OC CASION TO CONSIDER THE QUESTION AS PRAYED FOR ARISES. (C) IN ANY CASE, WE MAY POINT OUT THAT THE AMENDMENT TO SECTION 68 OF THE ACT BY THE ADDITION OF PROVISO THERETO TOOK PLACE WITH EFFECT FROM APRIL 1, 2013. THEREFORE, IT IS NOT APPLICABLE FOR THE SUBJECT ASSESSMENT YEAR 2012 -13. SO FOR AS THE PRE- AMENDED SECTION 68 OF THE ACT IS CONCERNED, THE SAME CANNOT BE INVOKED IN THIS CASE, AS EVIDENCE WAS LED BY THE RESPONDENTS-ASSESSEES BEFOR E THE ASSESSING OFFICER WITH REGARD TO IDENTITY, CAPACITY OF THE INVESTOR AS WEL L AS THE GENUINENESS OF THE INVESTMENT. THEREFORE, ADMITTEDLY, THE ASSESSING OF FICER DID NOT INVOKE SECTION 68 OF THE ACT TO BRING THE SHARE PREMIUM TO TAX. SIMILARL Y, THE COMMISSIONER OF INCOME- TAX (APPEALS) ON CONSIDERATION OF FACTS, FOUND THAT SEC TION 68 OF THE ACT CANNOT BE INVOKED. IN VIEW OF THE ABOVE, IT IS LIKELY THAT TH E REVENUE MAY HAVE TAKEN AN INFORMED DECISION NOT TO URGE THE ISSUE OF SECTION 68 OF THE ACT BEFORE THE TRIBUNAL. (D) WE MAY ALSO POINT OUT THAT DECISION OF THIS COURT IN MAJOR METALS LTD. V. UNION OF INDIA [2012] 19 TAXMANN.COM 176/207 TAXMAN 185/[2013] 359 ITR 450 BOM . PROCEEDED ON ITS OWN FACTS TO UPHOLD T HE INVOCATION OF SECTION 68 OF THE ACT BY THE SETTLEMENT COMMISSION. IN THE ABOVE CASE, THE SETTL EMENT COMMISSION ARRIVED AT A FINDING OF FACT THAT THE SUBSCRIBERS TO SHARES OF T HE ASSESSEE 'COMPANY WERE NOT CREDITWORTHY INASMUCH AS THEY DID NOT HAVE FINA NCIAL STANDING WHICH WOULD ENABLE THEM TO MAKE AN INVESTMENT OF RS. 6,00,00,000 AT PR EMIUM AT RS. 990 PER SHARE. IT WAS THIS FINDING OF THE FACT ARRIVED AT BY THE SETT LEMENT COMMISSION WHICH WAS NOT DISTURBED BY THIS COURT IN ITS WRIT JURISDICTION. I N THE PRESENT CASE THE PERSON WHO HAVE SUBSCRIBED TO THE SHARE AND PAID SHARE PREMIUM HAVE ADMITTEDLY MADE STATEMENT ON OATH BEFORE THE ASSESSING OFFICER AS RECORDED BY TH E TRIBUNAL. NO FINDING IN THIS CASE HAS BEEN GIVEN BY THE AUTHORITIES THAT SHAREHOLDER/ SHAR E APPLICANTS WERE UNIDENTIFIABLE OR BOGUS. (E) IN THE ABOVE VIEW QUESTION NO. A IS NOT BEING ENT ERTAINED IN VIEW OF THE DECISION IN TATA CHEMICAL LTD. (SUPRA). ACCORDINGLY, THE QUESTI ON (A) IS NOT ENTERTAINED. REGARDING QUESTION B : (A) WE FIND THAT THE IMPUGNED ORDER OF THE TRIBUNAL U PHELD THE VIEW OF THE COMMISSIONER OF INCOME- TAX (APPEALS) TO HOLD THAT SHARE PREMIUM IS CAPITAL RECEIPT AND THEREFORE, CANNOT BE TAXED AS INCOME. THIS CONCLUSION WAS REAC HED BY THE IMPUGNED ORDER FOLLOWING THE DECISION OF THIS COURT IN VODAFONE IN DIA SERVICES (P.) LTD. (SUPRA) AND OF THE APEX COURT IN G. S. HOMES AND HOTEL (P.) LTD. ( SUPRA ). IN BOTH THE ABOVE CASES THE COURT HAS HELD THAT THE AMOUNT RECEIVED ON ISSUE OF SHARE CAPITAL INCLUDING PREMIUM 10 ITA NO.2275/KOL/2016 M/S SAVERA TOWERS PVT. LTD. A.YR. 2012-13 10 ARE ON CAPITAL ACCOUNT AND CANNOT BE CONSIDERED TO BE INCOME. (B) IT IS FURTHER PERTINENT TO NOTE THAT THE DEFINITION OF INCOME AS PROVIDED UNDER SECTION 2(24) OF THE ACT AT THE RELEVANT TIME DID NOT DEFIN E AS INCOME ANY CONSIDERATION RECEIVED FOR ISSUE OF SHARE IN EXCESS OF ITS FAIR M ARKET VALUE. THIS CAME INTO THE STAT UTE ONLY WITH EFFECT FROM APRIL 1, 2013 AND THUS, WOULD HAVE, NO APPLICATION TO THE SHARE PREMIUM RECEIVED BY THE RESPONDENT'ASSESSEE IN TH E PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2012- 13. SIMILARLY, THE AMENDMENT TO SECTION 68 OF THE A CT BY ADDIT ION OF PROVISO WAS MADE SUBSEQUENT TO PREVIOUS YEAR RELEVANT TO THE SUBJECT ASSESSMENT YEAR 2012-13 AND CANNOT BE INVOKED. IT M AY BE POINTED OUT THAT THIS COURT IN CIT V. GAGANDEEP INFRASTRUCTURE (P.) LTD. [2017] 80 TAXMANN.COM 272/247 TAXMAN 245/394 ITR 680 (BOM.) HAS WHILE REFUSING TO ENTERTAIN A QUESTION WITH REGARD TO SECTION 68 OF THE ACT HAS HELD THAT THE P ROVISO TO SECTION 68 OF THE ACT INTRODUCED WITH EFFECT FROM APRIL 1, 2013 WILL NOT HAVE RETROSPECTIVE EFFECT AND WOULD BE EFFECTIVE ONLY FROM THE ASSESSMENT YEAR 2013-14. (C) IN VIEW OF THE ABOVE, QUESTION NO. B AS PROPOSED ALSO DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW AS IT IS AN ISSUE CONCL UDED BY THE DECISION OF THIS COU RT IN VODAFONE INDIA SERVICES (P.) LTD. (SUPRA) AND IN TH E APEX COURT IN G. S. HOMES AND HOTELS (P.) LTD. (SUPRA). THUS NOT ENTERTAINED. THEREFORE, ALL THE SIX APPEALS ARE DISMISSED. NO OR DER AS TO COSTS. 6.2. WE FIND THAT THE ISSUE UNDER DISPUTE WAS THE S UBJECT MATTER OF ADJUDICATION ON EXACTLY SIMILAR FACTS BY THIS TRIBUNAL IN THE CASE OF ITO VS TREND INFRA DEVELOPERS PVT LTD IN ITA NO. 2270/KOL/2016 DATED 26.10.2018 FOR A SST YEAR 2012-13, WHEREIN THE ADDITION MADE TOWARDS SHARE PREMIUM WAS DELETED. T HE FINDINGS GIVEN THEREIN ARE NOT REITERATED FOR THE SAKE OF BREVITY. 6.3. IN VIEW OF THE AFORESAID OBSERVATIONS IN THE F ACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENT RELIE D UPON HEREINABOVE, WE HOLD THAT THE LD. CIT(A) HAD RIGHTLY GRANTED RELIEF TO THE ASSESS EE IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WHICH IN OUR CONSIDERED OPINION, DOES NOT REQUIRE ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS 1 TO 3 RAISE D BY THE REVENUE ARE DISMISSED. 11 ITA NO.2275/KOL/2016 M/S SAVERA TOWERS PVT. LTD. A.YR. 2012-13 11 7. THE GROUND NO. 4 RAISED BY THE REVENUE IS GENERA L IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 05.12.2 018 SD/- SD/- [A T VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05.12.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-10(4), KOLKATA, P-7, CHOWRINGHEE SQUAR E, KOLKATA-700069. 2. M/S SAVERA TOWERS PVT. LTD., 13, K.B. SARANI, BL OCK-C303, DUM DUM, KOLKATA- 700080. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES