KANGRA VALLEY GARDEN HOTELS PRIVATE LIMITED,KANGRA V. .INCOME TAX OFFICER, WARD DHARAMSHALA, HIMACHAL PRADESH, DHARAMSHALA

ITA 601/CHANDI/2024

AI Insights

The case involves Kangra Valley Garden Hotels Pvt. Ltd., which appealed against the order of the CIT(A) concerning the assessment years 2013-14, 2014-15, and 2015-16. The primary issue was the treatment of share premium received from non-resident individuals as unexplained credits under Section 68 of the Income Tax Act, 1961. The Assessing Officer had added the share premium to the income of the assessee, questioning the genuineness and creditworthiness of the investors. The CIT(A) upheld this decision, leading to the second appeal before the Tribunal. The Tribunal noted procedural lapses in the CIT(A)'s handling of the appeal, particularly the lack of a personal hearing, and thus remanded the case for a fresh evaluation.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 39628 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Other Referred Cases: Commissioner of Income-Tax vs. Nova Promoters & Finlease (P) Limited, CIT Vs Lovely Exports, Commissioner of Income Tax vs. Nr Portfolio Pvt. Ltd., CIT vs. Nipun Builders & Developers, CIT vs. Durga Parsad More, Sumati Dayal vs. CIT, McDowell and Co. Ltd. vs. CIT, Bombay Oil Industries Ltd. Vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROHIT SHARMA; VIRTUAL
• Assessee Lawyers: MAYANK AGGARWAL
• Keywords: Set aside; Corroborative evidences; Unexplained cash credit; Principle of natural justice; Valuation report; Bogus
• Section: 143(3); 142(1); 143(2); 195; 250; 68; 22; 133(6); 234B; 246A

Judgement Text

" आयकर अपील य अ\u000bधकरण,च\u0010डीगढ़ \u0014यायपीठ , च\u0010डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘A’ CHANDIGARH BEFORE: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER आयकर अपील सं./ ITA Nos.600, 601 & 602/CHD/2024 \u0001नधा\u0005रण वष\u0005 / A.Ys : 2013-14, 2014-15 & 2015-16 Kangra Valley Garden Hotels Pvt. Ltd., Chak Ban Rakh Tea Estate, Near Tharoat Village, VPO Charri, Tehsil-Shahpur, Distt. Kangra (HP). बना म VS The ITO, Dharamshala (HP). \u000eथायी लेखा सं./PAN /TAN No: AADCK8100B अपीलाथ\u0019/Appellant \u001a\u001bयथ\u0019/Respondent \u0001नधा\u0005\u001cरती क\u001f ओर से/Assessee by : Shri Mayank Aggarwal, Advocate राज\u000eव क\u001f ओर से/ Revenue by : Shri Rohit Sharma, CIT DR (Virtual) तार\"ख/Date of Hearing : 09.12.2024 उदघोषणा क\u001f तार\"ख/Date of Pronouncement : 18.12.2024 HYBRID HEARING आदेश/ORDER PER PARESH M. JOSHI, JM (ITA 600/CHD/2024 : A.Y. 2013-14) This is an appeal filed by the assessee under Section 253 of the Income Tax Act, 1961 (hereinafter referred to as Act) before this Tribunal as and by way of second appeal. The assessee is aggrieved by the order bearing No.ITBA/NFAC/S/250/2024-25/1064403518 (1) dated 26.04.2024 passed by ld. CIT(A) under Section 250 of the Act which is hereinafter referred to as the ‘impugned order’. The ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 2 relevant assessment year is 2013-14 and the corresponding previous year period is from 01.04.2012 to 31.03.2013. 2. Factual Matrix 2.1. That the assessee company e-filed its return of income for the assessment year 2013-14 on 30.10.2013 and declared total income as Rs. ‘Nil’. 2.2 Thereafter the case was selected in scrutiny through CASS and the reason of selection as generated from the system was “Large Share Premium Received”. 2.3 That notice under Section 143(2) was generated on 3rd September, 2014 by ITO Ward 5(1) Chandigarh and served upon the assessee through Mail fixing the case for hearing on 12 Sept.,2014. 2.4 That another notice under Section 143(2) was issued through Mail fixing the case for hearing on 22 Sept.,2014. 2.5 That yet another notice under Section 143(2) was issued through Mail fixing the case for 27 Sept.,2014. 2.6 That thereafter the case was transferred to ITO, Dharmshala, HP in pursuance to the order under Section 127(2) dated 02.03.2015. ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 3 2.7 A detailed questionnaire alongwith notice under Section 142(1) of the Act was issued on 14th August, 2015 fixing the case for hearing on 26th August, 2015. 2.8 That in response to the said notice and further proceedings Shri Sanjiv Rana, Advocate, AR of the assessee attended the proceedings from time to time and filed replies and evidences as called for. 2.9 That the books of account alongwith vouchers were produced and examined on test check basis. 2.10 That as per \"Memorandum of Association\" of the company, the main object of the assessee company is to carry on the business of hotels, motels, resorts, guest houses etc and to develop tourism in India and abroad During the year under consideration, the assessee company has claimed only preoperative expenses and does not have any revenue from the operations. As per Memorandum and Articles of Association, the following persons shall be directors of the company :- (i) Nirvan Singh Gill (ii) Vivan Singh Gill (iii) Karan Singh Brar ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 4 2.11 That the reason for selection of the case was \"Large Share Premium Received\". The assessee was asked to file the details of the share applicants, number of shares allotted, nominal value, premium value etc alongwith supporting evidence. Consequently, the assessee filed the requisite reply on 18 Jan 2116. The assessee in his reply dated 18 Jan 2016 has stated that the present directors of the company are :- (i) Nikhilendra Singh (ii) Amarinder Singh Dhaliwal (iii) Nicholas Timothy Allan (iv) Jonathan Mark Edward Boyer During the year under consideration, the assessee company has received share application money of Rs. 17,39,27,429/- consisting of share capital of Rs 44,34,720/- (443472 shares were issued during the year) and share premium of Rs 16,94,92,709/- meaning thereby that shares were issued at a minimum premium of Rs 365 per share and ranging upto Rs 400 per share. The details are as given below :- ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 5 S. No. Name & Address PAN No of shares Date Nominal Value (Rs) Premium Value (Rs) Total Amount (Rs) 01 Jonathan Mark Edward Boyer A3 Spyglass Glass, 96 Repulse Bay Road, H mg Kong, HK, HONGKONG - 111095 02-Apr- 2012 11,10,950/- 4,05,49,675/- 4,16,60,625/- 02 Nicholas T Allan Kentisbeare House, Cullompton, EX152BR, United Kingdom - 55545 02-Apr- 2012 5,55,450/- 2,02,73,925/- 2,08,29,375/- 03 Jonathan Mark Edward Boyer A3 Spyglass Glass, 96 Repulse Bay Road, H mg Kong, HK, HONGKONG - 37714 25- Jul- 2012 3,77,140/- 1,37,65,610/- 1,41,42,750/- 04 Nicholas T Allan Kentisbeare House, Cullompton, EX15I BR, United Kingdom - 19365 25-Jul- 2012 1,93,650/- 70,68,225/- 72,61,875/- 05 Jonathan Mark Edward Boyer A3 Spyglass Glass, 96 Repulse Bay Road, Hong Kong, HK, HONGKONG - 146161 19- Mar- 2013 14,61,610/- 5,84,20,551.7/- 5,98,82,161.70/- 06 Nicholas T Allan Kentisbeare House, Cullompton, EX152BR, U.K. - 73592 19- Mar- 2013 7,35,920/- 2,94,14,722.4/- 3,01,50,642.40/- Total 443472 44,34,720/- 16,94,92,709.1/ - 17,39,27,429.1/- Information u/s 133(6) of the Income Tax Act, 1961 was called for from the above mentioned investors. Notice u/s 133(6) was issued to these persons requiring them to file the following details :- (i) Nature of business activities being carried out by you or by your company if you are representing any company and your business dealings with the above mentioned company. ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 6 (ii) State the face value of each share and also state that how much payment had been made during the F.Y. 2012-13 against these shares. Give the details of outstanding payment, if any, along with the documentary evidence. (iii) Whether these shares have been allotted to you. If yes, give the date of allotment alongwith the details q the payment made and outstanding payment, if any. (iv) Whether you have received any dividend or any other benefit out of such investment. (v) Whether you also have made such investments in the State of H.P. or any other state in the North India. If yes, details of the same may also be provided. (vi) Copy of the balance sheets where the above mentioned and such other investments have been reflected. Reply was received from only one investor i.e. Nicholas T Allan, Kentisbeare House, Cullompton, EX152BR, United Kingdom which is reproduced below:- In reference to the above referred letter, it is so state as under: 1. This is to confirm having made an investment in shares of Kangra Valley Garden Hotels Pvt. Ltd. The details of total allotment of shares in the said company is as under: S. No. No. of shares Date of Allotment Nominal value Premium value Total value 01. 55545 02-Apr-12 5,55,450/- 2,02,73,925/- 2,08,29,375/- 02. 19365 2 5-Jul-12 1,93,650/- 70,68,225/- 72,61,875/- 03. 73592 19-Mar-13 7,35,920/- 2,94,14,722/- 3,01,50,642/- Total 14,85,020/- 5,67,56,872/- 5,82,41,892/- ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 7 2. In relation to the allotment made on 2nd April, 2012 the application money was paid during the financial year 2011- 12. 3. Besides above company I had also made investment in other companies in India. 4. No dividend has been paid so far by the aforesaid company, as the construction work is still in progress and the commercial activities are yet to be commenced. We hope your goodself will find the above details in order. However, no reply to notice u/s 133(6) was Received in this office from the other investor i.e. Jonathan Mark ridward, A3, Spyglass Glass, 96 Repulse Bay Road, Hong Kong, HK, HONGKONG. In view of the above, the business activities of the investors are not ascertainable. Even the existence of the persons except on papers, cannot be verified. Further, the non availability of the income particulars in general and source of the above mentioned investments in particular of both the investing persons indicates that their creditworthiness is also questionable. In these strange circumstances, the genuineness of share application money received from such persons is questionable. Usually persons having good business, proper identity, future prospects, having profit motives ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 8 invest such huge share capital leave aside share premium. The company has received share application money at a very unreasonably high share premium. It is unusual that without any advertisement, any future prospects, profitability etc. persons from abroad like UK.& HONGKONG will invest in the assessee company. The whole transaction, even though tarried through banking channel, appears to be a make believe affair/transaction. The assessee has routed its own unexplained money in the guise of share application money. The view is being taken on the basis of reply received from one investor in response to notice u/s 133(6) and no communication received from the other investor and finally by placing the reliance upon following cases :- (i) Commissioner of Income-Tax vs. Nova Promoters & finlease (P) Limited. 342 ITR 169 (Del) In this case, the Hon'ble Delhi High Court held as under: ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 9 \"29. The findings of the Tribunal cannot be upheld as they are based on irrelevant material or have been entered by ignoring relevant, material. The finding that the share application monies have come through account payee cheques is, at best, neutral. The question required a thorough examination and not a superficial examination. If anything, in the light of the material gathered by the investigation wing about the modus operandi followed by the entry providers, the statements of Mukesh Gupta and Rahan Jassal the plea that the money was sent through banking channels loses all force. The Tribunal ought to have seen that the modus operandi involves receipt by the entry providers of equivalent amount of cash from the assessee. The judgment of Hon'ble Supreme Court in the case of CIT Vs Lovely Exports reported in 2008 266 CTR P 59 is also considered which states that ; \"If the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of Assessee Company.\" The present case is distinguishable on facts. In case of M/s Lovely Exports Limited, the Hon'ble Delhi High Court noted that the Assessing Officer has neither controverted nor disproved the material filed by the assessee. Again, the Hon'ble Delhi High Court, in the ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 10 case of Commissioner of Income-1 ax vs. Nova Promoters & Finlease (P) Limited. 342 ITR 169 (Del) has discussed the decision of the Hon'ble Supreme Court in the case of CIT vs. Lovely Exports P. Ltd. [2008] 216 CTR (SC) 195 viz-a-viz it's application in the case of a private Ltd. company and in cases where AO has through his investigations/enquiries established that the contributions of share capital is/are bogus/by nonexistent persons/entity of no means. The decision of Lovely Exports is not going in favour of the assessee as the ingredients of a transaction covered u/s 68 were completely looked into. (ii) Commissioner of Income Tax vs. Nr Portfolio Pvt. Ltd. on 22 November, 2013 \"Whether or not onus is discharged depends upon facts of each case. It depends on whether the two parties are related or known to each; the manner or mode by which the parties approached each other, whether the transaction was entered into through written documentation to protect the investment, whether the investor professes and was an angel investor, the quantum of money, creditworthiness of the recipients, the object and purpose for which payments/investment was made etc. These facts are basically and primarily in knowledge of the assessee and it are difficult for revenue to prove ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 11 and establish the negative. On the question of credits worthiness and genuineness, it was highlighted that the money no doubt was received through banking channels, but did not reflect actual genuine business activity. The share subscribers did not have their won profit making apparatus and were not involved in business activity. They merely rotated money, which was coming through the bank accounts, The bank accounts, therefore, did not reflect their creditworthiness or even genuineness of the transact on. The beneficiaries, including the respondent assessee, did not give any share- dividend or interest to the said entry operators/subscribers. The profit motive normal in case of investment was entirely absent. In the present case, no profit or dividend was declared on the shares. Any person, who would invest money or give loan would certainly seek return or income as consideration. These facts are adverted to and as noticed below are true and correct. They are undoubtedly relevant and material facts for ascertaining creditworthiness and genuineness of the transactions.\" (iii) Hon'ble Delhi High Court in CIT vs. Nipun Builders & Developers, 350ITR 407 (Del) held as under :- \"So far as the creditworthiness of the share subscribers is concerned, the contention of the assessee before us is that it was proved by the bank statements of those subscribers submitted before the Assessing Officer. The Assessing Officer has not referred to them in the assessment order but it is not in dispute that the copies of the bank statements were furnished before him. Even assuming that the bank statements were filed before the Assessing Officer, that by itself may not be sufficient to ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 12 prove that creditworthiness without any explanation for the deposits in the accounts and their source. The usual argument in all such cases, including the present case, is that it is not for the assessee to prove the source of source and origin of origin of the receipts. We are alive to the, difficulty that may be faced by an assessee to unimpeachably establish that creditworthiness of the share subscribers but at the same time we are of the opinion that men furnishing of the copies of the bank accounts of the subscribers is not sufficient to prove their creditworthiness. There must be, in our opinion, some positive evidence to show the nature and source of the resources of the share subscriber himself and, therefore, it is necessary for him to come before the Assessing Officer and confirm his sources from which he subscribed to the capital. In the present case, the assessee did not produce the principal officers of the companies who subscribed to the shares; it merely filed a letter at the \"dak\" counter of the Assessing Officer, stating that the communications sent by it to the share subscribers have not come back unserved. This is not compliance with the direction of the Assessing Officer who had issued notice to the assessee to produce the principal officers of the subscribing companies, as is well known, in the case of private limited companies, it cannot be denied that there is serious enough to establish its case, it ought to have produced the principal officers of sources from which the share subscription was made. That would also have taken care of the difficulty of the assessee in proving the creditworthiness of the subscriber companies. It was, therefore, in the assessee's own interest to have actively participated and cooperated in the assessment proceedings and complied with the direction of the Assessing Officer to produce the principle officers of the ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 13 subscribing companies. Instead, the assessee took an adamant, of we may use that expression, attitude and failed to comply with the direction of the Assessing Officer; not only that, it challenged the Assessing Officer's finding that the summons sent to the companies came back unserved with the remark \"no such company\", which was also supported by the report of the inspector who made a visit to the addresses. The assessee thus took a very extreme stand which was, in our opinion, not justified; certainly it did nothing worthwhile to discharge the onus to prove the creditworthiness of the subscribing companies.\" Receipt of such a high premium by the assessee company which is not eligible to fetch such a huge share capital lea ,-e aside share premium is against the human probability and just contrary to very nature of human conduct as held by the Hon'ble Supreme Court in the case of CIT vs. Durga Parsad More, ,1971) 82 ITR 540 (SC) in the said decision. The Hon'ble Supreme Court has categorically held that revenue is entitled to look into surrounding circumstances to find out the reality of recitals made in the documents in the case of Sumati Dayal vs. CIT 214 ITR 801 (SC), the Hon'ble Supreme Court has also held that the matter has to be considered in light of the human probabilities. \"It is a story that does not accord with human probabilities\". (iv) In the case of McDowell and Co. Ltd. [1985] 154 ITR 148, the following observation was made by the Supreme Court (Chinnappa Reddy J., with other judges of the Court) at page 160, which reads as hereunder: “In our ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 14 view, - the proper way to construe a taxing statue, while considering a device to avoid tax, is not to ask whether the provisions should be construed literally or liberally, nor whether the transaction is not unreal and not prohibited by the statute, but whether the transaction is a device to avoid tax, and whether the transaction is such that the judicial process may accord its approval to it\". Again page 171 (Ranganath Mishra, J with other Hon'ble Judges of the Court) has observed as follows: \"Tax planning may be legitimate provided it is within the framework of law, Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the believe that it is obligation of every citizen to pay the taxes honestly without resorting to subterfuges\". (v) Another important decision of the Supreme Court in this regard is the case of Workmen or - Associated Rubber Industry Ltd. Vs. Associated Rubber Industry Ltd. [1986] 157 ITR 77 (SC), where the Court held thus: \"It is duty of the court, in every case where ingenuity is expended to avoid taxing and welfare legislations, to get ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 15 behind the smoke screen and discover the true state of affairs. The Court is not to be satisfied with form and leave well alone the substance of a transaction. (vi) In the case of Bombay Oil Industries Ltd. Vs. DCIT [2000] 82 ITD 626, the following observation was made by the ITAT Mumbai - C Bench, which reads as under: \"Under the Income Tax Act, the income -tax authorities are empowered to go behind the apparent to find out the real and if a transaction, on the bases of the evidence and the surrounding circumstances of the case, appears to them to be non-genuine or a facade or a make believe affair, got up to evade the tax liability or if it appears that the series of steps taken to achieve the desired result is sham of collusive, they can ignore the transaction\". In light of the foregoing paras, the share premium money received by the assessee company from Jonathan Mark Edward Boyer, A3 Spyglass Glass, 96 Repulse Bay Road, Hong Kong, HK, HONGKONG and Nicholas T Allan, ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 16 Kentisbeare House, Cullompton, EX152BR, United Kingdom to the tune of Rs. 16,94,92,709/- (as per details given below) is treated as unexplained credits and is treated as income of the assessee company within the meaning of section 68 of the IT Act, 1961. Name & Address Share Premium Jonathan Mark Edward Boyv r, A3 Spyglass Glass, 96 Repulse Bay Road, Hong Kong, HK, HONGKONG Rs 11,27,35,837/- Nicholas T Allan, Kentish are House, Cullompton, EX152BR, United Kingdom Rs 5,67,56,872/- Total Rs 16,94,92,709/- 2.12 Perusal of the Profit & Loss Account of the assessee company reveal that the company has received a dividend of Rs 6,88,365/- under the head \"Other Income\" of the Profit & Loss Account. Going by the main objects of the assessee company, the income by way of dividend is clearly income from other sources. Moreover, the assessee company has invested the money received in the shape of share application money into SBI Mutual Funds and received a dividend of Rs 6,88,365/- on the same. This clearly establish that the assessee has utilized the funds raised for business purpose into generating the ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 17 income in the form of dividend i.e. Income from Other Sources i or the assessee company. Therefore, the dividend received by the assessee company at Rs 6,88,365/- is treated as income from other sources arid taxed accordingly. (Addition: Rs 6,88,365/-) 2.13 Total income of the assessee was computed as under : Returned income : Rs Nil Add : As discussed above in para-3 : Rs 16,94,92,709/ As discussed above in para-4 : Rs 6,88,365/- Total assessed income : Rs.17,01,81,074/- 2.14 The aforesaid assessment order of ld. AO is dated 29.03.2016 passed under Section 143(3) of the Act. 3. That the assessee being aggrieved by the aforesaid assessment order of ld. AO dated 29.03.2016 prefers first appeal in terms of Section 246A of the Act before ld. CIT(A) who by passing the impugned order however, has dismissed their appeal. Consequently aforesaid additions stand sustained. 4. That the assessee being aggrieved by the impugned order has preferred second appeal before us and inter-alia ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 18 has raised following grounds against the impugned order which are as follows : “1. The order passed by the Learned Assessing Officer (\"Ld. AO\") is bad in law and facts of the case 2. The Learned Commissioner of Income Tax (Appeals) (“Ld. CIT(A)/Ld.AO have erred in ignoring the submissions and details filed by the appellant 3. The Ld CTT(A) has erred in not providing a personal hearing to the appellant before passing the order. 4. The Ld CIT(A) / Ld. AO have erred in invoking the provisions of section 68 of the Income Tax Act, 1961 (\"the Act\") with respect to share premium amount received by the appellant from non-resident individuals and by treating the same as unexplained credits 5. The Ld C1T(A) / Ld. AO have erred in holding that appellant received unreasonably high share premium amount without any future prospects and in ignoring the valuation report filed by the appellant 6. The Ld. C1T(A) / Ld. AO have erred in making additions of share premium amount by ignoring that the same is not taxable in the hands of the appellant under section 56(2)(viib) read with section 5 and section 2(24)(xvi) of the Act. 7. The Ld. CIT(A)/Ld. AO have erred in levying interest under 234B of the Act. 8. The Ld. AO has erred in initiating penalty under section 271 (l)(c) of the Act. 9. The above grounds are independent and without prejudice to one another.” 5. Record of Hearing 5.1 The hearing in the matter took place before this Tribunal on 09.12.2024 when both the ld. AR and ld. DR were heard on their respective submissions. It was ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 19 contended by ld. AR for and on behalf of the assessee that the impugned order is illegal, bad in law and not proper and in violation of the principles of natural justice in as much as before passing the impugned order the ld. CIT(A) did not afford to them any opportunity of personal hearing, hence the impugned order be set aside and matter may kindly be remitted back to CIT(A) for denovo adjudication of their first appeal. The ld. AR has produced before us a chart which is giving share issuance details by the assessee company, which is as under : Assessment Year Name of Shareholder No. of Shares Month Face Value Premiu m Face value amount Premium Amount Total Amount 2013-14 NICHOLAS TIMOTHY ALLAN 55,545 April 2012 10 365 5,55,450 2,02,73,925 2,08,29,375 19,365 July 2012 10 365 1,93,650 70,68,225 72,61,875 73,592 March 2013 10 399.7 7,35,920 2,94,14,722 3,01,50,642 JONATHAN MARK EDWARD BOYER 1,11,095 April 2012 10 365 11,10,950 4,05,49,675 4,16,60,625 37,714 July 2012 10 365 3,77,140 1,37,65,610 1,41,42,750 1,46,161 March 2013 10 399.7 14,61,610 5,84,20,552 5,98,82,162 Total 4,43,472 44,34,720 16,94,92,709 17,39,27,429 2014-15 NICHOLAS TIMOTHY ALLAN 48,816 November 2013 10 399.7 4,88,160 1,95,11,755 1,99,99,915 24,052 March 2014 10 399.7 2,40,520 96,13,584 98,54,104 JONATHAN MARK 97,632 November 2013 10 399.7 9,76,320 3,90,23,510 3,99,99,830 ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 20 EDWARD BOYER 24,408 March 2014 10 399.7 2,44,080 97,55,878 99,99,958 Total 1,94,908 19,49,080 7,79,04,728 7,98,53,808 2015-16 NICHOLAS TIMOTHY ALLAN 45,330 August 2014 10 399.7 4,53,300 1,81,18,401 1,85,71,701 2,874 August 2014 10 400 28,740 11,49,600 11,78,340 16,191 December 2014 10 400 1,61,910 64,76,400 66,38,310 JONATHAN MARK EDWARD 48,810 June 2014 10 399.7 4,88,100 1,95,09,357 1,99,97,457 BOYER 67,480 August 2014 10 399.7 6,74,800 2,69,71,756 2,76,46,556 5,746 August 2014 10 400 57,460 22,98,400 23,55,860 32,519 December 2014 10 400 3,25,190 1,30,07,600 1,33,32,790 Sub-total 2,18,950 70 2,799 21,89,500 8,75,31,514 8,97,21,014 Amrinder Singh 4,850 10 400 48,500 19,40,000 19,88,500 Nikhilendra Singh 7,000 10 400 70,000 28,00,000 28,70,000 Grand Total 2,30,800 23,08,000 9,22,71,514 9,45,79,514 Basis above, it was contended that for assessment year 2013-14, 2014-15, 2015-16, there are premium amount against issue of shares. The ld. DR, however, has gone by the order of lower authority and have left it to this Tribunal to pass a suitable order in accordance with law. ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 21 6. Findings & Conclusions 6.1 We have carefully perused the record of the case, have heard the arguments and submissions of both the parties i.e., ld. AR for and on behalf of the assessee and ld. DR for and on behalf of the Department and are of the view that the impugned order is indeed bad in law and in violation of the principles of natural justice as no opportunity was afforded to the assessee of personal hearing before dismissing their appeal. 6.2 In the premises set out hereinabove, we are of the considered view that a detailed explanation be provided by the assessee company to the first appellate authority in such a manner that merits of their explanation be considered by him on meritorious grounds. We, therefore, set aside the impugned order and remand the case back to ld. CIT(A) on denovo basis. We direct assessee to place before CIT(A) all material information, documents etc., so that CIT(A) can adjudge and adjudicate the first appeal on merits. Needless to state CIT(A) should pass a speaking and reasoned order. The assessee to cooperate in disposing off the first appeal and not to seek unnecessary adjournments and delay the due process of law. ITA Nos. 600,601 & 602/CHD/2024 A.Y. 2013-14, 2014-15 & 2015-16 22 6.3 In result, appeal of the assessee is allowed as and by way of remand on denovo basis. 6.4 Appeal allowed for statistical purposes. ITA 601 & 602/CHD/2024 6.5 As the facts, issues and circumstances in ITA No. 601 & 602/CHD/2024 are similar to that of ITA No.600/CHD/2024, therefore, our findings given in ITA No.600/CHD/2024 would apply mutatis-mutandis to ITA No.601 & 602/CHD/2024 also. Accordingly, ITA No.601 & 602/CHD/2024 are also allowed for statistical purposes. 6.6 In result, all appeals of assessee stand allowed for statistical purposes. Order pronounced on 18.12.2024. Sd/- Sd/- (VIKRAM SINGH YADAV) ( PARESH M. JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश क\u0002 \u0003ितिलिप अ\tेिषत/ Copy of the order forwarded to : 1. अपीलाथ\u000f/ The Appellant 2. \u0003\u0010यथ\u000f/ The Respondent 3. आयकर आयु\u0014/ CIT 4. िवभागीय \u0003ितिनिध, आयकर अपीलीय आिधकरण, च\u0018डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड\u001c फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "