Gorja International Pvt Ltd, Hisar V. ITO WARD-02, Hisar

ITA 3598/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5368 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 25-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S. N. MEENA
• Keywords: Principle of natural justice; Fair market value; Set aside
• Section: 150(1); 251; 22; 20

Judgement Text

1 ITA NO. 3598/DEL/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. NO. 3598/DEL/20 19 (A.Y. 2015-16) GORJA INTERNATIONAL PVT. LTD., 23, PREM NAGAR, RAVI SADAN, HISAR, HARYANA. (APPELLANT) VS INCOME TAX OFFICER, WARD 02, HISAR (AADCG 8709 N) ( RESPONDENT) APPELLANT BY SHRI RAVI PRATAP MALL, ADV. RESPONDENT BY SHRI S. N. MEENA, SR. D.R. ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX [APPEALS]-5, LUDHIANA DA TED 26.02.2019 FOR ASSESSMENT YEAR 2015-16. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN DISMISSING THE APPEAL O F THE APPELLANT ON THE GROUND THAT REASON FOR DELAY OF 10 DAYS IN FILING O F THE APPEAL IS NOT SUPPORTED BY ANY AFFIDAVIT, WHEREAS AS PER THE STAT UTORY REQUIREMENT, APPELLANT HAS DULY GIVEN THE REASONS FOR DELAY IN F ILING OF THE APPEAL AT SI. NO. 14-15 OF FORM 35. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN NOT CONDONING THE DELAY OF 10 DAYS IN FILING OF THE APPEAL PURELY ON TECHNICAL CONSIDERATION WITHOU T APPRECIATING THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIO NS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERV ES TO BE PREFERRED. DATE OF HEARING 22.01.2020 DATE OF PRONOUNCEMENT 18 .02.2020 2 ITA NO. 3598/DEL/2019 3. WITHOUT PREJUDICE TO THE AFORESAID GROUND, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN DISMISSING OF THE APPEAL FOR WANT OF THE AFFIDAVIT IN SUPPORT OF THE REASON OF DELAY WITHOUT PROVIDING ANY OPPORTUNITY WHAT SO EVER AS S UCH, ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS UNS USTAINABLE IN LAW AND IS LIABLE TO SET ASIDE. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN FAILING TO APPRECIATE T HAT THE ADDITION MADE BY THE LEARNED AO OF RS. 1,11,23,000/- BY INVOKING SEC TION 56(2)(VIIB) OF THE INCOME TAX ACT, 1961 IS UNSUSTAINABLE IN LAW. 5. THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) H AVING HELD THAT THE APPEAL IS INVALID HAS GROSSLY ERRED IN ISSUING DIRE CTIONS U/S 150(1) OF THE ACT TO THE ASSESSING OFFICER TO EXAMINE THE SHARE C APITAL RECEIVED IN AY 2012-13 AS SUCH, DIRECTIONS WERE BEYOND THE POWERS OF SECTION 251 OF THE ACT. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY. DURIN G THE F.Y. 2015-16 THE ASSESSEE COMPANY ISSUED SHARE CAPITAL. THE ASSESSEE ISSUED 22800 SHARES OF RS.10 EACH AT RS.500 EACH CONSISTING OF RS.10 ON AC COUNT OF SHARE CAPITAL AND RS.490 ON ACCOUNT OF SHARE PREMIUM. THE ISSUED PRIC ES WAS CALCULATED ON THE BASIS OF FAIR MARKET VALUE OF THE COMPANY AS ON 31. 03.2015 AS DEFINED RULE 11UA OF THE INCOME TAX RULES, 1962. THE FAIR MARKET VALUE OF UNQUOTED EQUITY SHARES WAS SHOWN IN THE BALANCE SHEET. FOLLOWING TH E PROVISIONS OF THIS RULE THE FAIR MARKET VALUE OF SHARES OF THE COMPANY IS C ALCULATED RS.505.30 PER SHARE AND THE COMPANY ISSUES ITS SHARES AT RS.500 E ACH. THE ASSESSING OFFICER VIDE IS ASSESSMENT ORDER DATED 12.12.2018 REFUSED T O ACCEPT THE FAIR MARKET VALUE OF SHARES CALCULATED BY THE COMPANY ON THE BA SIS OF NET WORTH OF THE COMPANY. 3. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A) THEREBY STATING THAT THERE IS A 10 DAYS DELAY IN FILING THE APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL ON THE GROUND THAT THE APPEAL IS TIME BARRED AND NOT MAINTAINABLE. 4. THE LD AR SUBMITTED THAT IT IS AN ADMITTED FACT ON RECORD THAT THERE IS A DELAY OF 10 DAYS IN FILING THE APPEAL BEFORE THE CI T(A). THE LD AR FURTHER 3 ITA NO. 3598/DEL/2019 SUBMITTED THAT AT NO POINT OF TIME THE CIT(A) HAS D IRECTED THE ASSESSEE TO FILE AFFIDAVIT FOR CONDONATION OF DELAY. THE LD AR SUBMI TTED THAT AT THE TIME OF HEARING BEFORE THE CIT(A) THE ASSESSEE HAS DEMONSTR ATED THAT THE DELAY WAS GENUINE AND HENCE MAY BE CONDONED. THUS THE LD AR S UBMITTED THAT THE CIT(A) SHOULD HAVE CONDONED THE DELAY AND SHOULD HA VE DECIDED THE APPEAL ON MERIT. THEREFORE, THE LD AR REQUESTED THAT THE DELA Y IN FILING THE APPEAL BEFORE THE CIT(A) BE CONDONED AND THE APPEAL MAY BE REMAND ED BACK TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. 5. THE LD DR RELIED UPON THE ASSESSMENT ORDER AND T HE ORDER OF THE CIT(A) THE LD DR SUBMITTED THAT SINCE THE AFFIDAVIT STATIN G THEREIN THE REASONS FOR DELAY WAS NOT FILED, THE CIT(A) RIGHTLY DISMISSED T HE APPEAL OF THE ASSESSEE. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIALS AVAILABLE ON RECORD. IT IS AN ADMITTED FACT THAT TH ERE IS A DELAY OF 10 DAYS IN FILING THE APPEAL BEFORE THE CIT(A). THE ASSESSEE H AS EXPLAINED THE DELAY BEFORE THE CIT(A) BUT NO AFFIDAVIT HAS BEEN FILED TO THAT EXTENT. THE LD AR AT THE TIME OF HEARING SUBMITTED THE AFFIDAVIT STATING THEREIN THE GENUINE REASON FOR DELAY IN FILING THE APPEAL BEFORE THE CIT(A). WE, THEREFO RE, FIND IT FIT TO CONDONE THE DELAY AND REMAND BACK ALL THE ISSUES ON MERIT TO BE DECIDED BY THE CIT(A) AFRESH. NEEDLESS TO SAY THE ASSESSEE BE GIVEN OPPOR TUNITY OF HEARING BY FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE. THE APP EAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18TH DAY OF FEBRUARY, 2020 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 18/02/2020 4 ITA NO. 3598/DEL/2019 PRITI YADAV, SR. PS /R.N* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 22 . 01 .20 20 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2 3 . 01 .20 20 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER .01 .20 20 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS .01.2020 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .01.2020 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 1 9 . 0 2 .2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 9 . 0 2 .2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 1 9 . 0 2 .2020 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK