Hinshitsu Manufacturing Private Limited , Hyderabad V. Asst. Commissioner of Income Tax, Circle-2(2), Hyderabad

ITA 244/Hyd/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4663 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 02-09-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 03-03-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V. RAJITHA
• Keywords: Fair market value
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ITA NO.244/HYD/2020 A.Y. 2016 - 17 M/S. HINSHITSU MANUFACTURING PRIVATE LIMITED, HYDERABAD 500 037. PAN: AADCH 2580 C VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY SRI A. SRINIVAS REVENUE BY SMT. V. RAJITHA, DR DATE OF HEARING: 02/9/2021 DATE OF PRONOUNCEMENT: 16 /9/2021 ORDER PER A. MOHAN ALANKAMONY , A.M: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A) - 2, HYDERABAD IN APPEAL NO. 10338/2018 - 19/CIT(A) - 2, DATED 09/01/2020 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE A.Y. 2016 - 17. 2. THE ASSESSEE HAS RAISED FIVE GROUNDS IN ITS APPEAL AND THEY ARE EXTRACTED HEREIN BELOW FOR REFERENCE: - 2 1. THE ORDER OF THE LD. CIT (A) IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCES. 2. THE APPELLATE COMMISSIONER ERRED IN CONFIRMING THE ORDER OF THE A.O. WHO REJECTED THE DISCOUNTED CASH FLOW METHOD FOLLOWED BY THE ASSESSEE FOR VALUING QUALITY SHARES AND PREMIUM THEREON. 3. THE APPELL ATE COMMISSIONER ERRED IN CONFIRMING THE A.O.S DECISION TO CALCULATE THE FAIR MARKET VALUE OF SHARES BASED ON BOOK VALUE METHOD. 4. THE APPELLATE COMMISSIONER ERRED IN CONFIRMING THE ADDITION OF RS. 12,70,42,580/ - MADE BY THE A.O. FOR CALCULATION PREMIUM ON SHARES U/S. 56(2)(VII)(B). 5. ANY OTHER GROUNDS WHICH THE APPELLANT MAY URGE AT OR BEFORE THE DATE OF HEARING. 3. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE US BY STATING THAT THE LD. CIT (A) HAS PASSED EX - PARTE ORDER WITHOUT PROVIDING PROPER OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. IT WAS THEREFORE PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LD CIT (A) IN ORDER TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD . LD. DR, ON THE OTHER HAND, VEHEMENTLY OPPOSED TO THE SUBMISSIONS OF THE LD. AR AND ARGUED THAT SUFFICIENT OPPORTUNITIES HAD BEEN PROVIDED TO THE ASSESSEE HOWEVER, ON THE GIVEN DATES OF HEARING, NEITHER THE ASSESSEE NOR HIS REPRESENTATIVE APPEARED BEFORE THE LD. CIT (A) EXCEPT FILING THE WRITTEN SUBMIS SIONS. THEREFORE, THE LD. CIT (A) HAD NO OTHER OPTION BUT TO PASS EX - PARTE ORDER BASED ON THE MATERIALS AVAILABLE ON RECORD. HENCE, IT WAS PLEADED THAT THE ORDER PASSED BY THE LD. CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. 3 4. WE HAVE HEARD THE RIVAL SUBM ISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON EXAMINING THE FACTS OF THE CASE, WE FIND MERIT IN THE SUBMISSIONS OF THE LD. DR. BEFORE THE LD. CIT (A) WHEN THE CASE WAS POSTED FOR HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE GIVEN D ATE OF HEARING. THEREFORE, THE LD. CIT (A) WAS LEFT WITH NO OTHER OPTION EXCEPT TO ADJUDICATE THE APPEAL EX - PARTE BASED ON THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD. IN THIS SITUATION, WE DO NOT FIND MUCH ST RENGTH IN THE ARGUMENTS ADVANCED BY THE LD. AR. HOWEVER, CONSIDERING THE PRAYER OF THE LD. AR AND TAKING INTO CONSIDERATION OF THE ISSUES INVOLVED IN THE APPEAL, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF LD. CIT (A) IN ORDE R TO CONSIDER THE APPEAL AFRESH ON MERITS BY PROVIDING ONE MORE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. AT THE SAME BREATH, WE ALSO HEREBY CAUTION THE ASSESSEE TO PROMPTLY CO - OPERATE BEFORE THE LD. CIT (A) IN THE PROCEEDINGS FAILING WHICH THE LD. CIT ( A) SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW AND MERITS BASED ON THE MATERIALS AVAILABLE ON THE RECORD. IT IS ORDERED ACCORDINGLY. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HE REINABOVE. PRONOUNCED IN THE OPEN COURT ON THE 16 TH SEPTEMBER, 2021. SD/ - SD/ - (S.S. GODARA) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 16 TH SEPTEMBER , 2021. 4 OKK COPY TO: - 1) M/S. HINSHITSU MANUFACTURING PRIVATE LIMITED, H.NO. 11 - 6 - 56, SURVEY NO.257, 258/1, OPP. IDPL RAILWAY SIDING ROAD, MOOSAPET, KUKATPALLY, HYDERABAD 500 2) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2(2), BOTANICAL GARDENS, KONDAPUR, HYDERABAD. 3) THE CIT (A) - 2, HYDERABAD. 4) THE PRINCIPAL COMMISSIONER OF INCOME TAX - 2, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE