SKYSCRAPER REALBUILD PVT. LTD. ,GANDHINAGAR V. THE ITO, WARD-1(1)(1), AHMEDABAD

ITA 2174/AHD/2024

AI Insights

The case involves Skyscraper Realbuild Pvt. Ltd., which appealed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, confirming the addition of Rs. 1,26,40,000 under Section 56(2)(viib) of the Income Tax Act, 1961 for the Assessment Year 2014-15. The addition was based on the premium received from issuing equity shares, which was deemed taxable as income from other sources. The CIT(A) upheld the Assessing Officer's decision without independent examination, leading to the appeal. The Tribunal found that the CIT(A) did not provide a reasoned order and failed to address the assessee's arguments and valuation reports, thus violating principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29567 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Set aside; Fair market value; Principle of natural justice; Valuation report; Non passing of speaking order
• Section: 56(2)

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदा बा द \u0012ा यपीठ “ C”, अहमदा बा द । IN THE INCOME TAX APPELLATE TRIBUNAL “ C ” BENCH, AHMEDABAD \u0015ी टी.आर. से\u0019\u001aल क ुमा र, \u0012ा ियक सद\u001c एवं \u0015ी मकरंद वसंत महा देवकर, लेखा सद\u001c क े सम\"। ] ] BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.2174/Ahd/2024 िनधा \u0010रण वष\u0010 /Assessment Year : 2014-15 Skyscraper Realbuild Pvt. Ltd., First Floor, 115, Satyamev Aawas, Coconut, Kudasan, Gandhinagar-382421. (Gujarat) बनाम/ v/s. The Income Tax Officer, Ward-1(1)(1) Ahmedabad \u0014थायी लेखा सं./PAN: AAICA8859J अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee by : Shri Mehul K Patel, AR Revenue by : Shri Rignesh Das, Sr-DR सुनवाई की तारीख/Date of Hearing : 20/02/2025 घोषणा की तारीख /Date of Pronouncement: 21/02/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: ] ] This appeal by the assessee is directed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) [CIT(A)], dated 15.10.2024, confirming the addition of Rs. 1,26,40,000/- made under Section 56(2)(viib) of the Income Tax Act, 1961 [the Act] for the Assessment Year 2014-15. ITA No.2174/Ahd/2024. Skyscraper Realbuild pvt ltd vs. ITO A.Y. 2-14-15 2 Facts of the Case 2. The assessee had issued 5,16,000 equity shares at a premium of Rs. 24 per share and had received a total share premium of Rs. 1,26,40,000/-. The Assessing Officer (AO), while computing the Fair Market Value (FMV) under Rule 11UA of the Income Tax Rules, 1962, determined the FMV at Rs. 9.32 per share and held that the premium received in excess of FMV was taxable as income from other sources under Section 56(2)(viib). 3. The CIT(A), in its order dated 15.10.2024, confirmed the addition without independently examining the assessee’s contentions and merely relied on the findings of the AO. 4. Aggrieved by the order of CIT)A) the assessee filed the present appeal before us with following grounds of appeal- 1. That on facts, and in law, the learned NEAC has grievously erred in not providing sufficient and reasonable opportunity of hearing and in deciding the appeal by a non speaking order. 2. That on facts and in law, the learned NEAC has grievously erred in confirming the addition of Rs. 1, 26, 40,000/- made u/s 56(2) (viib) of the Act. 3. That on facts, evidence on record, and in law, the learned NEAC ought to have accepted the valuation done by appellant's C.A. and ought to have held that the provisions of section 56(2) (viib) of the Act are not applicable and the entire addition ought to have been deleted, as prayed for. 4. The appellant craves leave to add, alter, amend any ground of appeal. 5. During the course of hearing before is Learned Authorized Representative (AR) of the Assessee submitted that The CIT(A) has not passed a speaking order and has merely relied on the order of the AO ITA No.2174/Ahd/2024. Skyscraper Realbuild pvt ltd vs. ITO A.Y. 2-14-15 3 without conducting an independent examination of the facts. The AR further submitted that the valuation report submitted by the assessee’s Chartered Accountant (CA) was disregarded without any specific reasoning and the principles of natural justice were violated, as no proper opportunity was granted, and the order lacks reasoning. 6. Learned Departmental Representative (DR) conceded that the order of CIT(A) does not contain independent findings and that the matter may be remanded for fresh consideration. 7. We have considered the submissions of both parties and perused the records. It is evident from the impugned order that CIT(A) has not applied independent reasoning and has merely affirmed the order of the AO. The order lacks discussion on the assessee’s arguments, valuation reports, and other evidences placed on record. 7.1 As per settled legal principles, an appellate authority is required to examine the merits of the case and pass a speaking order by dealing with all arguments raised by the appellant. The absence of independent findings renders the order unsustainable. 7.2 It is also settled principle of law that a non-speaking order, which fails to examine the submissions of the appellant, is liable to be set aside. 7.3 In view of the above, we find that the CIT(A) has failed to discharge its appellate duty of providing independent findings and passing a reasoned order. We, therefore, set aside the impugned order and restore the matter back to the file of CIT(A) for fresh adjudication. The CIT(A) is ITA No.2174/Ahd/2024. Skyscraper Realbuild pvt ltd vs. ITO A.Y. 2-14-15 4 directed to Examine all contentions of the assessee in detail, including the valuation reports submitted and Pass a speaking order by addressing all issues raised by the appellant. The CIT(A) shall Provide a reasonable opportunity of hearing to the assessee before deciding the appeal. 8. In the result, the appeal is allowed for statistical purposes. Order pronounced in the Open Court on 21st February,2025 at Ahmedabad. Sd/- Sd/- (T.R. SENTHIL KUMAR) JUDICIAL MEMBER (MAKARAND V.MAHADEOKAR) ACCOUNTANT MEMBER Ahmedabad, Dated 21/02/2025 Manish, Sr. PS आदेश की \u001fितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ! / The Appellant 2. \u001f\"थ! / The Respondent. 3. संबंिधत आयकर आयु$ / Concerned CIT 4. आयकर आयु$ ) अपील ( / The CIT(Exemption)-Ahmedabad 5. िवभागीय \u001fितिनिध , आयकर अपीलीय अिधकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाड\u0010 फाईल / Guard file. आदेशानुसार/ BY ORDER, स\"ािपत \u001fित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad "