INCOME TAX OFFICER 11(3)(2), MUMBAI V. VARAD VINAYAK REALTY PRIVATE LIMITED, MUMBAI

ITA 5279/MUM/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0234 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 10-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Unexplained cash credit; Transfer pricing; Share purchase agreement; Principle of natural justice; Valuation report; Set aside
• Section: 68; 148; 139; 142(1); 56(2); 133(6); 143(2); 113; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F”, MUMBAI BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER& SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.5279/MUM/2017 (A.Y.2009-10) ITO, 11-3(2), Room No. 428, Aayakar Bhavan, M.K. Road, Mumbai-400020 ............ Appellant Vs. M/s Varad Vinayak Realty P. Ltd., 105, VastuShilp, Rajmata Jijabai Road, Pump House, Andheri (E), Mumbai-400093 PAN: AABCV7419A ............ Respondent C.O. No. 50/MUM/2019 in ITA NO.5279/MUM/2017 (A.Y.2009-10) M/s Varad Vinayak Realty P. Ltd., 105, VastuShilp, Rajmata Jijabai Road, Pump House, Andheri (E), Mumbai-400093 PAN: AABCV7419A ............ Appellant Vs. ITO, 11-3(2), Room No. 428, Aayakar Bhavan, M.K. Road, Mumbai-400020 ............ Respondent ITA NO.612/MUM/2019 (A.Y.2009-10) M/s Varad Vinayak Realty P. Ltd., 105, VastuShilp, Rajmata Jijabai Road, Pump House, Andheri (E), 2 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. Mumbai-400093 PAN: AABCV7419A ............ Appellant Vs. ITO, 11-3(2), Room No. 428, Aayakar Bhavan, M.K. Road, Mumbai-400020 ............ Respondent Appellant by : Sh. S.N. Kabra, Sr. DR Respondent by : Sh. Pawan Chakrapani, AR Date of hearing : 08/12/2021 Date of pronouncement : 12/01/2022 ORDER PER LALIET KUMAR, J.M: All these three appeals are filed by the Revenue challenging the order passed by the Commissioner of Income Tax (Appeals)-1, Thane [hereinafter referred to as ‘the CIT(A)’] vide order dated 13.02.2020 on the ground mentioned in the respective appeals. Grounds of ITA No. 5279/M/2017 1. “Whether on the facts and In the circumstances of the case and in law, the Ld.CIT(A) erred in deleting addition of Rs.3,61,00,000/- u/s.68 of the Income- tax Act, 1961. The order of the Ld.CIT(A) Is perverse and department is relying on the decision of Hon'ble Delhi High Court in the case of M/s. Nova Promoters & Finance (P) Ltd. dated 15.02.2012, in which the Hon'ble Delhi High Court discussed the case of M/s. Lovely Exports and after discussion it did not accept the decision of the Hon’ble Supreme Court after differentiating the fact of the case and held that unexplained share application money received can be taxed u/s.68 of the Income-tax Act, 1961.” 2. “Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in appreciating the fact that identity of the shareholders cannot merely be established by furnishing PAN, copies of return of income alongwith all schedules, bank statement, request letter for application of shares, etc. or assessment particulars did not establish the identity of the person, which only 3 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. shows that the company has an identity without appreciating the fact that these were only paper companies having bogus addresses. In view of this, department is relying on the decision of ITAT, Indore in the case of Aggarwal Coal Corporation Pvt. Ltd. v/s. Addi.CIT Range 5, Indore in ITA No.151/Ind./2009 dated 31.10.2011.” 3. “Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in appreciating the fact that by merely submitting that money was received through banking channels did not reflect genuine business activity and the companies merely routed money which was given back through bank account. The movement of the money through bank account is not sufficient to establish creditworthiness or even genuineness of the transaction.” 4. “Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in appreciating the fact that the AO has clearly established that valuation was motivated in as much as assessee company has never shown any worthwhile profit on or after such credit of share premium to warrant the buying of its share at such high premium by other entities/companies.” 5. The appellant prays that the order of the Ld.CIT(A), Mumbai on the above grounds be set aside and that of the A.O. be restored. 2. ................... Grounds of C.O. 50 1. The order of the learned Commissioner of Income-tax [Appeals] in so far as it is against the Respondent / Cross Objector are opposed to law, weight of evidence, natural justice, facts and circumstances of the case. 2. The Respondent / Cross Objector denies itself liable to be assessed over and above the income returned by the Respondent / Cross Objector of Rs. 26,410/under the facts and circumstances of the case. 3. The learned Commissioner of Income-tax (Appeals) ought to have appreciated that the order of assessment passed by the learned Assessing Officer is bad in law as the objections raised by the Appellant have not been disposed off by a speaking order by the learned Assessing Officer before completing the assessment, under the facts and circumstances of the case. 4 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. 4. The learned Commissioner of Income-tax (Appeals) ought to have cancelled the order of assessment passed under section 143[3] r.w.s. 147 of the Act, as the procedure laid down by the Honorable Apex Court in the case of GKN Driveshaft India Private Limited, 259 ITR 19, has not been followed, under the facts and circumstances of the case. Grounds of ITA No. 612/M/2019 1. The order of the authorities below in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant’s case. 2. The Appellant denies himself liable to be assessed on the total income of Rs. 3,61,26,410/-, as against the loss declared in the return of income of Rs. 26,410/- , under the facts and circumstances of the case. 3. The Assessment Order passed by the learned Assessing Officer under section 143[3] r.w.s. 147 of the Act, is bad in law, since the mandatory conditions as envisaged in the Act, to assume jurisdiction for re-opening of assessment did not exist or having not being complied with and consequently the reassessment order passed by the learned Assessing Officer requires to be cancelled, under the facts and circumstances of the case. 4. The Assessment Order passed by the learned Assessing Officer under section 143[3] r.w.s. 147 of the Act, is bad in law and unsustainable, as the order is passed without disposing off the objections raised by the Appellant, under the facts and circumstances of the case. 3. In the present case the assessee has filed the Cross objection on 5.2.2019 and in the cross objection the assessee had raised the following plea “The order of the assessment passed by the Ld. assessing officer is bad in law since the Ld. assessing officer has not issued and served to the statutory mandatory notice under section 143 (2) of the Act, on a return filed by the appellant pursuant to the notice issued under section 148 of the Act consequently the impugned order of assessment passed by the Ld. assessing officer on an invalid procedure is void ab–initio and impugned order of the 5 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. assessment passed by the Ld. assessing officer is bad in law and invalid and required to be cancelled, on the facts and circumstances of the case” Brief Facts 4.1 In this case the assessee filed the return of income for the assessment year 2009 – 2010 declaring the total income of ₹ 26, 410/-on 28 September 2009. 4.2 Notice under section 148 of the act was issued on 13 March 2014 and which was duly served on the assessee. In the said notice the assessee was called upon by the assessing officer to file the return of income. In the notice dated 13 March 2014 it was mentioned as under:- “whereas I have reasons to believe that your income chargeable to tax for the assessment year 2009-10 has escaped assessment within the meaning of section 147. I therefore propose to assess the income for the said assessment year and I hereby require you to deliver to me within 30 days from the date of service of this notice, a return in the prescribed form of your income for the said assessment year. This notice is being issued after obtaining the necessary satisfaction of the Commissioner of income tax/ the Central Board of direct taxes” 5. As required by the assessing officer to file the return of income within 30 days of the receipt of the notice, the assessee has not filed any return of income. As per the case of the assessee the assessee filed the 6 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. return of income in response to the notice under section 148 of the act only on 22 January 2015. 6. In between the assessing officer had issued the notice under section 142(1) of the Act and had also allegedly issued the notice under section 143(2) on the assessee on 25 July 2014. 7. As there was no compliance of the notice issued under section 142 (1) of the Act, another notice was issued to the assessee on 8th January 2015. 8. The assessee complied with the notice issued under section 142(1) throw its legal representative namely M/s Hemani & Company Charted Accountant vide their letter dated 22 nd January 2015. 9. The letter dated 22 January 2015 provided as under:- “1. The assessee has already filed the return of income on 28.09 .2009 e- filing acknowledgement No. 92980880280909 declaring the total taxable income of Rs. 26410/- 2 Kindly treat the aforesaid return of income as filed in compliance to the notice under reference . 3. Your honour is requested to kindly issue the certificate copy of the reasons recorded for reopening the assessment for A.Y. 2009-10 and approval obtained , if any for issuance of notice under reference to enable us to raise our objections earlier if any.” 10. From the perusal of the letter dated 22 January 2015 it is abundantly clear that the said letter was written in pursuant to the receipt of the noticedated13.3.2014 under section 148, and letter dated 25.7.2014 under section 142(1) of the Act. 7 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. 11. On 23 February 2015, the assessing officer provided the reasons for reopening of the assessment for the assessment year 2009 -2010, as sought by the assessee vide their letter dated 22 January 2015. 12. Thereafter the assessee filed the objection two reasons for reopening of assessment under section 147 of the act along with providing the other information to the assessing officer vide the communication dated 25 February 2015 . In the said letter dated 25 February 2015 the reference was mentioned as under “Ref:- your notice dated 13.3.2014u/s 148 of the income tax act and notices dated 25.7.2014 and 8.01.2015 u/s 142(1) of the Income Tax Act, 1961 and further hearing held thereafter” 13. The assessing officer has rejected the objection raised by the assessee and had made the assessment in the hands of the assessee by making the addition of ₹ 3, 61, 00, 000/-. In paragraph 6 of the assessment order the assessing officer had mentioned as under “(6) After carefully considering the assessee objection, it is seen that the assessee has issued 19,000 shares of Rupees 100 each at the premium of ₹ 1900 share and earned premium of ₹ 3, 61, 00, 000 as income during the year. The assessee balance sheet does not show the valid result or increase in its value per share. The assessee has not justified the value of share at the rate of ₹ 1, 900 per share as against the face value of Rupees 100 per share. Obviously it is income earned by the assessee, resorting to issue of shares at a high premium, which has to be brought to tax as income for the assessment year 2009 – 10. I therefore reject the assessee objection and proceed to assess the income of the assessee for AY 2009 – 10 under the provisions of section 147 of the IT act 1961. 7...................... 8 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. 8 It is pertinent to note that confirmations enclosed by the assessee company from the above mentioned 17 shareholders in respect of purchase of premium does not show the creditworthiness of the shareholders. In fact the assessee is obliged to explain not only the source of the share premium but also its nature. The assessee has offered explanation simply stating that the excessive share premium is covered by the provisions of section 56(2) (viib) of the IT act 1961 and is applicable from 2013-14. The assessee company has failed to establish the interest on the value of the share to be Rs. 1900/per share at which the assessee has received the share premium. Therefore the receipt of share premium at rate ofRs. 1,900 per share stands unexplained and the assessee case is hit by the provision of section 68 of IT act 1961. It may also be mentioned that the assessee plea that provisions of section 56(2)(viib_) of the IT act 1961 and is applicable from AY 2013 – 14 is not acceptable as these provisions are clarification and therefore applicable to the excessive share premium received by the assessee company during the day by 2009– 10. In view of the above excessive share premium of ₹ 3, 61, 00, 000/received by the assessee is added to the assessee total income under section 68 of the IT act 1961. 14. Feeling aggrieved by the order passed by the assessing officer, the assessee filed the appeal before the CIT(A), the CIT(A) had granted the relief to the assessee. The Ld. CIT(A) in order and provided the following reasons for deleting the addition made by the assessing officer: “Since both the grounds are related to addition of Rs.3.61 Cr by way of Share Premium u/s 68, the same are decided together. Under these Grounds of Appeal, the Appellant has agitated addition of Rs.3.61 Cr u/s. 68 being amount of share premium received by the Appellant during the year under appeal by disregarding amendment of section 56(2)(viib) amended w.e.f. A.Y. 2013-14. I have carefully considered contentions of the Appellant as well as the assessment 9 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. records in this regard. On perusal of the same, I find that the A.O. has added a sum of Rs.3.61 Cr u/s 68 by way of unexplained cash credit. I find that the Appellant issued 19000 equity shares @ 2000/- each which included share premium of Rs.1900/- per share having face value of Rs.100/- each. The A.O. called for the necessary details in respect of 17 share holders mentioned in Para No.7, at Page No.2 of Assessment Order. The Appellant also filed necessary confirmations which were rejected by the A.O. by holding that, “it is pertinent to note that confirmations enclosed by the assessee company from the above mentioned 17 share holders in respect of purchase of shares at a premium, does not show the creditworthiness of the shareholders. In fact, the assessee is obliged toexplain not only the source of share premium but also the nature. The assessee has offered explanation simply stating that the excessive share premium is covered by the provisions of sec. 56(2)(viib) of the Act applicable from A.Y. 2013-14. The assessee company has failed to establish the intrinsic value of its shares to be Rs.1900/- per share at which the assessee has received the share premium”. Accordingly, the A.O. added Rs.3.61 Cr us 68 On the other hand, I find that e Appellant has complied with all the enquiries made by the A.O. u/s 133(6) which inter alia, includes details e.g. Acknowledgement of return, PAN, Audited Accounts, details of investments, their bank statements, copy of share certificates, copy of share application, copy of Board Resolution, to substantiate the identity, genuineness’ and creditworthiness of the share holders. The A.O. did not make any further verification or observations on the same. The A.O. merely rejected all these summarily which is against the principle of natural justice. Not only that but no comments were offered on the detailed submissions made by the share holders directly to the A.O. I therefore find that the initial burden casts upon the Appellant is duly discharged by them u/s. 133(6). The Appellant has satisfactorily proved source of share capital and share premium. Not only that but the Appellant also relied upon Valuation Report of M/s. S.V. Dave & Co. dated 10.01.2009 in support of share valuation of Rs.2,128/- which is nearer to issue Price of shares at Rs.2000/- (100 + 10 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. 1900). Moreover, I find substantial strength in the averment of the Appellant that amendment to sec. 56(2)(viib) is effective only from A.Y. 2013-14. This view is also strengthen by the ratio of order in the case of Green Infra Ltd. (145 ITD 240) (Mum). Respectfully following recent judgement of jurisdictional High court in the case of CIT Vs. Gangadeep Infrastructure Pvt. Ltd. (2017) 80 Taxmann.com 272 (Bom HC). I also find that various case laws relied upon by the Appellant substantially advance the case of the Appellant in this regard. Moreover, amendment to sec. 68 is also w.e.f. A.Y. 2013-14. It is further noticed that the A.O. has accepted the amount of share capital of Rs.100/- per share but added only Rs.1900/- per share being share premium. This clearly shows that the A.O. has accepted identity, genuineness and creditworthiness of the share holders but merely doubted genuineness of share premium. This is against the golden Rule of interpretation. I therefore find that the A.O. has adopted contradictory stand in respect of share premium which was rejected and share capital which was accepted. This is also against the observations made by the A.O. which are merely based on surmises and conjectures which cannot form the basis of any addition tenable in law. I also find fortified by the Instruction No.2 of 2015 dated 29.01.2015 issued by the CBDT in which it is emphasized that the premium on share issued was on account of Capital Account transaction and does not give rise to income. Although the same was issued in relation to Transfer Pricing Adjustment, the ratio descendi applies same way to domestic transactions of share capital and share premium. In view of the above, I therefore, direct the A.O to delete the addition of Rs.3.61 Cr in respect of share premium u/s 68.“ 15. Now the revenue is in appeal before us for the grounds stated hereinabove and the assessee is in cross appealand grass objection of the reasons and above. 11 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. 16. Firstly will take the Cross objection filed by the assessee whereby the assessee submitted that assessing officer has not shown the mandatory notice under section143(2) of the Act. 17. In this regard the Ld.AR for the assessee has taken us to the assessment order passed by the assessing officer and more particularly paragraph 2and 3 of the order whereby, it was submitted that there was no mention of issuance of notice under section 143(2) of the Act by the assessing officer. It was also the contention of the assessee that the assessing officer in paragraph 3 and mentioned that the assessee had filed the information as called for, which have been verified and place on record. 18. It was contended by the Ld. AR that the assessee had filed the letter dated22.1.2015, whereby it was stated that the return of income filed on 28.9.2009, be treated as return of income filed in compliance to the notice under reference. We had already reproduced the said letter and for the purpose of the record. 19. It was submitted by the Ld.AR that no notice under section 143(2) was issued by the assessing officer after the receipt of letter dated 22.1.2015. He relied upon the decision of the Hon’ble Supreme Court in the matter of Hotel Blue Moon [2010] 188 Taxman 113 (SC) 20. Bench during the hearing had directed the Ld. DR to file a statement of fact whether in the notice was served before or after 22.1.2015. 21. In response to the direction of the bench, the Ld.DR for the revenue had filed the letter dated 8/12/2021, whereby it was confirmed by the DR that no 12 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. notice under section was issued after143(2) of the Act after 22/1/2015 . The copy of the said letter is reproduced herein below: 22. The Ld.DR for the revenue had filed another letter dated 13.12.202 13 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. whereby it was submitted by the DR that notice under section 148 was issued by speed post on 14 March 2014, asking the assessee to furnish the return within 30 days. It was further submitted in the said letter that as no response from the assessee was received within the stipulated time of 30 days till 25 July 2014, notice under section 142(1) and 143(2) of the act was issued by the AO to the assessee on 25.7.2014. However, it was categorically mentioned that no notice under section 143 (2) was issued after 22.1.2015. The letter along with the annexure are scanned and are reproduced herein below. 14 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. 15 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. 16 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. 17 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. 23. We have considered the rival contention of the parties and perused the material available on record, including the judgments cited at bar during the course of hearing by both the parties. Section 143(2) of the act provides as under:- (2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it 18 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.] 24 From the reading of section 143(2) it is abundantly clear that where the return is filed under section 139 of the Act and assessing officer is deem it necessary and expedient that the assessee has understated the income then the assessing officer shall serve on the assessee notice requiring him to attend the office or any evidence any document which assessee may rely in support of return . 25. From the perusal of the letters, dated 8/12/2021 and 13/12/21 it is clear I. Only letter dated 25/7/2014 under section 143(2) was issued to the assessee along with letter under section 142(1) of the Act. II. No proof had been filed by the revenue before us showing the service of the notice dated 25/7/2014 under section 143 (2) on the assessee. III. From the perusal of the letter dated 25 July 2014, it is not clear as to how the said letter was sent to the assessee. IV. The revenue had filed the proof of sending the notice under section 148, by speed post before us, however neither the mode of service was 19 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. mentioned nor proof of service of the notice dated 25/7/2014 was filed before us. V. Even the notice under section 143 (2) dated25/7/2014 was having the dispatch No. ITO. Wd. 8(3) (4)/ 142(1)/2014-15 ,this clearly shows that no separate record was maintained by the assessing officer with respect to dispatch of the notice issued under section 143(2) of the Act. VI. In the present case the assessee had filed the letter dated 22 January 2015, wherein it was requested by the assessee that the return of income filed on 28 September 2009, be treated as return of income filed in compliance of the notice under section 148 / 142(1)of the Act. VII. In the assessment order, the assessing officer has neither mentioned issuance of notice under section 143(2) not mention about the proof of service of the said notice on the assessee. VIII. In the assessment order, there is no whisper of the steps taken by the assessing officer, after allegedly issuing notice under section 143(2) of the act. IX. Though in the submissions, it was mentioned that as the assessee has not filed the return of income within 30 days of from the date of issuance of notice under section 148, therefore the letter dated 25 July 2015, however there is no reference of this letter in the assessment order or anywhere else except filing the submissions dated 13.12 .2021 26. From the above said discussions, it is abundantly clear that no notice was served upon the assessee under section 143(2) of the Act, after issuing notice under section 148 by the assessing officer. Even though the copy of the notice dated 25.7.2014, is filed before us, however there is no evidence of issuance 20 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. of this notice and service thereof. Moreover as recorded hereinabove there is no discussion or reference of issuance of this notice in the assessment order. In the light of the above we are of the opinion that no jurisdictional notice had been issued by the assessing officer under section 143(2) of the Act. In the light of the above we are of the considered opinion that the Cross objection raised by the assessee in the present set of appeals is required to be allowed. In the light of the above the Cross objection filed by the assessee is allowed and consequently the appeal filed by the revenue is required to be dismissed. We accordingly dismissed the revenue appeal. 27. Though we have dismissed the revenue appeal, on account of non- issuance of the jurisdictional notice under section 143(2) of the Act, however we deem it appropriate to record that the assessing officer during the assessment proceedings had accepted the share capital contribution made by the 17 parties and it is as so mentioned in paragraph 7 of the assessment order. However, the assessing officer without bringing anything on record had added the share premium received by the assessee, from the same 17, entities. In our considered opinion once the assessing officer accepted the existence of 17 entities, by accepting the share capital contribution made by them to the assessee, then the three legal requirements namely identity of creditors genuineness of transaction and creditworthiness of creditors were accepted by the assessing officer respect to share capital contribution. Then in our considered opinion it cannot be alleged by the assessing officer to by saying that the additions are required to be made under section 68 of the Act. In any case the assessee had discharge its onus by bringing on record the cogent evidence proving the identity, creditworthiness and genuineness of the transaction. Even these 17 entities have directly provided requisite 21 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. information called by the AO under section 133(6) of the Act namely Acknowledgement of return, PAN, Audited Accounts, details of investments, their bank statements, copy of share certificates, copy of share application, copy of Board Resolution, to substantiate the identity, genuineness’ and creditworthiness of the shareholders, however nothing contrary was brought on record by the AO. 28. Further AO relied upon the amended section of 56( 2) ( viib) of the Act and concluded that the assessee failed to establish the intrinsic value of shares to be Rs. 1900 per share and has wrongly held that though this provision was inserted w.e.fA.Y2013-14 hence applicable being clarificatory in nature. In our considered opinion the finding recorded by the A.O is incorrect as decided by the Ld. CIT(A) whereby the Ld. CIT(A) has held that the amendment Sec. 56(2)(viib) is prospective in nature and is applicable from the F.Y2013-14. For this reason also the appeal of the revenue is required to be dismissed. 29. In the result, the appeal of the revenue is dismissed and cross objection and cross appeal of the assessee are allowed. Order pronounced in the court on 12.01.2022. –Sd/- –Sd/- (S. RIFAUR RAHMAN) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई/Mumbai,Dated: /12/2021 SK, PS ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 22 ITA No. 5279 Mum 2017 with C.O. 50 Mum 2019 & ITA No. 612 Mum 2019 M/s Varad Vinayak Realty P. Ltd. 3. आयकर आयुᲦ(अ)/The CIT(A)- 4. आयकर आयुᲦ CIT 5. िवभागीय ᮧितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 6. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt.Registrar) ITAT, Mumbai Details Date Initials Designation 1 Draft dictated on (dictation sheet is enclosed with main file) 09.12.2021 Sr.PS/PS 2 Draft Placed before author 09.12.2021 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order