M/s Amita Properties Pvt. Ltd., Kolkata V. I.T.O.,Ward-11(1), Kolkata

ITA 2463/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1163 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-06-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 18-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Fair market value; Valuation report; Set aside
• Section: 143(3)

Judgement Text

ITA NO. 2463/KOL/2019 ASSESSMENT YEAR: 2015-2016 M/S. AMITA PROPERTIES PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT I.T.A. NO. 2463/KOL/2019 ASSESSMENT YEAR: 2015-2016 M/S. AMITA PROPERTIES PVT. LIMITED,................ .....................APPELLANT 6, ALIPORE PARK ROAD, ALIPORE, KOLKATA-700027 [PAN: AAICA8889Q]] -VS.- INCOME TAX OFFICER,................................ ................................RESPONDENT WARD-11(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 APPEARANCES BY: SHRI RAVI TULSIYAN, ADVOCATE, FOR THE APPELLANT SHRI SUPRIYO PAL, JCIT, D.R., FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : JUNE 01, 2020 DATE OF PRONOUNCING THE ORDER : JUNE 01, 2020 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-17, KOLKATA DA TED 05.09.2019 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION OF RS.14,65,094/- MADE BY THE ASSESSING OFFICER AND CO NFIRMED BY THE LD. CIT(APPEALS) UNDER SECTION 56(2)(VIIB) OF THE INCOM E TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 24.09.2015 DECLARING TOTAL INCOME OF RS.3,28,094/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE-COMPANY HAD ALLOTTED 75 ,833 EQUITY SHARES OF THE FACE VALUE OF RS.10/- EACH TO M/S. AMITA AGARWA L BENEFICIARY TRUST FOR ITA NO. 2463/KOL/2019 ASSESSMENT YEAR: 2015-2016 M/S. AMITA PROPERTIES PVT. LIMITED 2 RS.200/- EACH INCLUDING A PREMIUM OF RS.190/- PER S HARE. DURING THE ASSESSMENT PROCEEDINGS, A VALUATION REPORT CERTIFIE D BY A CHARTERED ACCOUNTANT WAS FURNISHED BY THE ASSESSEE AS PER RUL E 11UA OF THE INCOME TAX RULES, 1962 SHOWING THE FAIR MARKET VALUE OF IT S SHARES AT RS.180.68 PER SHARE. THE ASSESSING OFFICER, THEREFORE, REQUIR ED THE ASSESSEE TO EXPLAIN THE DIFFERENCE OF RS.19.32 IN THE VALUE OF SHARES AND ALSO ASKED THE ASSESSEE TO SHOW-CAUSE AS TO WHY THE DIFFERENCE IN VALUE OF SHARES ALLOTTED TO M/S. AMITA AGARWAL BENEFICIARY TRUST SH OULD NOT BE ADDED TO ITS TOTAL INCOME UNDER SECTION 56(2)(VIIB) OF THE A CT. THE ASSESSEE, HOWEVER, FAILED TO COMPLY WITH THIS REQUIREMENT AND ACCORDINGLY THE DIFFERENCE OF RS.14,65,094/- (75,833 SHARES MULTIPL IED BY RS.19.32) WAS ADDED BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 56(2)(VIIB) OF THE ACT IN THE ASSESSMENT CO MPLETED UNDER SECTION 143(3) VIDE HIS ORDER DATED 07.08.2017. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) AND THE FOLLOWING SUBMISSION, INTER AL IA, WAS FILED BY THE ASSESSEE IN WRITING TO SUPPORT AND SUBSTANTIATE THE PRICE OF RS.200/- PER SHARE CHARGED BY IT TO M/S. AMITA AGARWAL BENEFICIA RY TRUST:- UNDER THESE FACTS, IT IS SUBMITTED THAT THE UNDERL YING ASSET IN THE APPELLANT COMPANY IS AN OFFICE SPACE AQT ECP SPACE BUSINESS PARK, BLOCK-4B, UNIT NO. ESNT 4B 0804, PLO T NO. 11F/10, ACTION AREA-II, NEW TOWN, RAJARHAT, KOLKATA WHICH IS A COMMERCIAL PROPERTY HAVING SUPER BUILT AREA OF 5890 SQ.FT. AND SIX NOS. OF CAR PARKING SPACE. THE SAID COMMERCIAL SPACE WAS ALLOTTED TO THE COMPANY DURING FY 2010-11 AT A TOTAL CONSIDERATION OF RS.3,04,54,363/- AND PAYMENT S WERE MADE DURING FYS 2010-11 TO 2012-13. APART FROM THE SAID SPACE, THE APPELLANT WAS ALSO HAVING OTHER ASSETS L IKE CASH AND BANK BALANCE. THE APPELLANT HAD GOT ITS SAID PR OPERTY VALUED BY A REGISTERED VALUER M/S. IDEAL CONSULTANC Y SERVICES, WHO HAD VIDE THEIR REPORT DATED 15.03.201 5 DETERMINED THE FMV OF THE IMPUGNED PROPERTY AT RS.3 24.96 LACS AND THE GUIDELINE VALUE OF THIS COMMERCIAL SPA CE AS PER GOVT. VALUATION AT RS.381.23 LACS. ON THE ABOVE PRE MISE, THE APPELLANT HAD DETERMINED THE ISSUE PRICE OF SHARES AS PER CLAUSE (A)(II) OF EXPLANATION TO S. 56(2)(VIIB) OF THE ACT BY ITA NO. 2463/KOL/2019 ASSESSMENT YEAR: 2015-2016 M/S. AMITA PROPERTIES PVT. LIMITED 3 SUBSTITUTING ASSET VALUE DETERMINED BY THE REGISTER ED VALUER AND THE FMV PER SHARE CAME TO RS.200.10 AS PER CALC ULATION BELOW:- TOTAL VALUE OF ASSETS AS ON 31.03.2014 INVESTMENT IN PROPERTY(BOOK VALUE RS.3,04,54,363) RS.3,24,96,000 CASH & CASH EQUIVALENTS RS. 21,412 OTHER CURRENT ASSETS: RENT RECEIVABLE RS. 50,000 RS.3,25,67,412 LESS: TOTAL VALUE OF LIABILITIES AS ON 31.03.20 14 TOTAL LIABILITIES 3,05,30,775 LESS: SHAREHOLDER FUND 1,88,24,389 RS.1,17,06,386 RS.2,08,61,026 PAID UP VALUE OF EQUITY SHARE RS.10/- TOTAL AMOUNT OF PAID UP EQUITY SHARE RS.10,42,500/- FMV OF UNQUOTED EQUITY SHARES RS.200.10 THE APPELLANT THUS ADOPTED FMV OF THE EQUITY SHARES ALLOTTED TO AMITA AGARWAL BENEFICIARY TRUST ON THE BASIS OF HIG HER OF VALUATION AS PER RULE 11UA AND INTRINSIC VALUE OF U NDERLYING ASSETS HELD BY THE COMPANY AS PER CLAUSE (A)(II) OF EXPLANATION TO SEC. 56(2)(VIIB) OF THE ACT, WHICH WAS IN THIS CASE WAS RS.200.10 PER SHARE. IN THE LIGHT OF THE ABOVE SUBMISSION, A REQUEST WAS MADE ON BEHALF OF THE ASSESSEE TO THE LD. CIT(APPEALS) TO ADMIT THE VALUA TION REPORT OF ASSET AS NEW EVIDENCE AND DELETE THE ADDITION MADE BY THE AS SESSING OFFICER UNDER SECTION 56(2)(VIIB) OF THE ACT AS FAIR MARKET VALUE OF SHARES ARRIVED ON THE BASIS OF THE SAID REPORT AT RS.200.10 WAS HI GHER THAN THE FAIR MARKET VALUE ARRIVED UNDER RULE 11UA OF THE INCOME TAX RULES, 1962. 4. NOT SATISFIED WITH THE SUBMISSION OF THE ASSESSE E, THE LD. CIT(APPEALS) CONFIRMED THE ADDITION MADE BY THE ASS ESSING OFFICER UNDER ITA NO. 2463/KOL/2019 ASSESSMENT YEAR: 2015-2016 M/S. AMITA PROPERTIES PVT. LIMITED 4 SECTION 56(2)(VIIB) OF THE ACT FOR THE FOLLOWING RE ASON GIVEN IN PARAGRAPH NO. 4 OF HIS IMPUGNED ORDER:- I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPE LLANT. AS THERE IS NO MERIT IN THE SUBMISSION OF THE APPEL LANT AND BASED ON THE FACTS AND FINDINGS NARRATED BY THE LD. AO IN THE ASSESSMENT ORDER, THE APPEAL OF THE APPELLAN T IS HEREBY DISMISSED. THE AO IS JUSTIFIED IN DISALLOWAN CE U/S 56(2)(VIIB) OF RS.14,65,094/- AND THEREFORE, THE AD DITION MADE BY THE LD. AO IN THIS REGARD IS HEREBY CONFIRM ED. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE MAIN GRI EVANCE OF THE ASSESEE AS HIGHLIGHTED BY THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE THE TRIBUNAL IS THAT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF VALUATION REPORT OF ASSET AS WELL AS TH E CASE MADE OUT BY THE ASSESSEE ON THE BASIS OF THE SAME WAS NOT AT ALL CO NSIDERED BY THE LD. CIT(APPEALS) AND WITHOUT GIVING ANY FINDING OR RECO RDING OBSERVATION THEREON, HE DECIDED THE ISSUE AGAINST THE ASSESSEE BY PASSING A CRYPTIC ORDER. 6. THE LD. D.R. HAS NOT DISPUTED THIS POSITION, WHI CH IS CLEARLY EVIDENT FROM THE IMPUGNED ORDER OF THE LD. CIT(APPEALS). HE , HOWEVER, HAS CONTENDED THAT THERE BEING NO EXPLANATION OFFERED B Y THE ASSESSEE IN SUPPORT OF THE DIFFERENCE OF VALUATION DURING THE C OURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER AND THE VA LUATION REPORT OF ASSET HAVING BEEN FILED BY THE ASSESSEE FOR THE FIRST TIM E BEFORE THE LD. CIT(APPEALS) TO EXPLAIN THE SAID DIFFERENCE, THE MA TTER MAY BE SENT BACK TO THE ASSESSING OFFICER FOR GIVING HIM AN OPPORTUN ITY TO EXAMINE/VERIFY THE EXPLANATION OF THE ASSESSEE IN THE LIGHT OF THE SAID VALUATION REPORT. I FIND MERIT IN THE CONTENTION OF THE LD. D.R. AND SI NCE THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO NOT RAISED ANY OBJECTION FOR SENDING THE MATTER BACK ITA NO. 2463/KOL/2019 ASSESSMENT YEAR: 2015-2016 M/S. AMITA PROPERTIES PVT. LIMITED 5 TO THE ASSESSING OFFICER FOR PROPER VERIFICATION/EX AMINATION, I SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) O N THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFF ICER FOR DECIDING THE SAME AFRESH AFTER EXAMINING/VERIFYING THE EXPLANATI ON OF THE ASSESSEE REGARDING THE DIFFERENCE IN VALUATION OF SHARES IN THE LIGHT OF THE VALUATION REPORT OF ASSET FILED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE LD. CIT(APPEALS). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 01, 2020 . SD/- (P.M. JAGTAP) VICE- PRESIDENT) KOLKATA, THE 1 ST DAY OF JUNE, 2020 COPIES TO : (1) M/S. AMITA PROPERTIES PVT. LIMITED, 6, ALIPORE PARK ROAD, ALIPORE, KOLKATA-700027 (2) INCOME TAX OFFICER, WARD-11(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-17, K OLKATA; (4) COMMISSIONER OF INCOME TAX- , KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.