M/S JHARKHAND STEEL MANUFACTURER PVT. LTD.,JAMSHEDPUR vs. INCOME TAX OFFICER, JAMSHEDPUR

The captioned two appeals have been preferred by the different but related assessees against the separate orders dated 14.08.2017 of the Commissioner of Income Tax (Appeals), Jamshedpur [hereinafter referred to as the ‘CIT(A)’] passed u/s 250 of the Income Tax Act M/s Jaiswal Steel Industries Pvt. Ltd M/s Jharkhand Steel Manufacturer Pvt. Ltd Assessment Year: 2014-15 (hereinafter referred to as the ‘Act’). Since, common issues are involved in both the appeals, hence, these have heard together and are being disposed of by this common order.

The appeal in ITA No.369/Ran/2018 is taken as lead case for the purpose of narration of facts. The assessee in this appeal has contested the addition made by the Assessing Officer of Rs.17,77,203/- u/s 56(2)(viib) of the Act on account of higher share application money received than the fair market value. 3. At the outset, the ld. Counsel for the assessee has submitted that during the assessment year under consideration, the assessee had allotted 36,100 @ INR 1,000 each. Of these, application money for 16,600 shares was received in the assessment year 2013-14 & 2012- 13 (prior years) itself. That such prior application money received was subject to scrutiny under section 143(3) of the Act during AY 2013-14 itself and certain additions were also made under section 56(2)(viib) at that point of time. That the Ld. Assessing Officer re-assessed such money received in prior years again in the given year, suggesting that the same was taxable on allotment. Thus, the Assessing Officer went on to make double taxation of the same income by breaking principle of consistency. The ld. Counsel, therefore, has submitted that since the share application money received by the assessee in earlier years has already been subjected to assessment and certain additions have also been made u/s 56(2)(viib) on that point of time, therefore, the Assessing Officer was not justified in making the double addition in respect of same amount and also on the same issue.