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Facts
The assessee company received a significant share premium from an entity registered in Mauritius. The Assessing Officer and CIT(A) treated this premium as an unexplained cash credit under Section 68 of the Income Tax Act, 1961, citing a lack of justification and genuineness of the transaction.
Held
The Tribunal noted the assessee's explanation for the delay in filing the appeal, which was accepted. Regarding the merits, the Tribunal found that the additional evidence sought to be introduced was material and essential for a fair adjudication, and hence set aside the orders of the lower authorities.
Key Issues
1. Whether the delay in filing the appeal should be condoned. 2. Whether the share premium received from a Mauritius-based entity is a genuine transaction or an introduction of unaccounted income, justifying addition under Section 68 of the Income Tax Act.
Sections Cited
68, 143(2), 142(1), 250
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI OM PRAKASH KANT
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 21.03.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2013-14, raising following grounds:
1. On the facts and circumstances of the case and in law, the Ld.
On the facts and circumstances of the case and in law, the Ld.
1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Ld. AO in treating CIT(A) erred in confirming the action of the Ld. AO in treating CIT(A) erred in confirming the action of the Ld. AO in treating premium received on issuance of shares by the Appellant, totaling premium received on issuance of shares by the Appellant, totaling premium received on issuance of shares by the Appellant, totaling to Rs. 14,99,57,141/ to Rs. 14,99,57,141/-, as unexplained cash credit u/s 68 of the , as unexplained cash credit u/s 68 of the Income Tax Act, 1961 ('Act'). Income Tax Act, 1961 ('Act').
2. On the facts and circumstanc 2. On the facts and circumstances of the case and in law, the Ld. es of the case and in law, the Ld. CIT(A) and the Ld.AO erred in holding that the Appellant had not CIT(A) and the Ld.AO erred in holding that the Appellant had not CIT(A) and the Ld.AO erred in holding that the Appellant had not furnished any documentary evidence or confirmation, with regard furnished any documentary evidence or confirmation, with regard furnished any documentary evidence or confirmation, with regard to share premium amounting to Rs. 14,99,57,141/ to share premium amounting to Rs. 14,99,57,141/-received during received during the previous year 2012 the previous year 2012-13.
3. On the facts and circumstances of the case and in law, the Ld. . On the facts and circumstances of the case and in law, the Ld. . On the facts and circumstances of the case and in law, the Ld. CIT(A) and the Ld. AO have erred in holding that there was no CIT(A) and the Ld. AO have erred in holding that there was no CIT(A) and the Ld. AO have erred in holding that there was no justification for receipt of share premium amounting to Rs. justification for receipt of share premium amounting to Rs. justification for receipt of share premium amounting to Rs. 14,99,57,141/ 14,99,57,141/- on issue of shares by the appellant during the on issue of shares by the appellant during the previous year 2012 s year 2012-13.
4. On the facts and circumstances of the case and in law, the Ld 4. On the facts and circumstances of the case and in law, the Ld 4. On the facts and circumstances of the case and in law, the Ld CIT(A) and the Ld. AO have erred in holding that the appellant has CIT(A) and the Ld. AO have erred in holding that the appellant has CIT(A) and the Ld. AO have erred in holding that the appellant has failed to prove identity and creditworthiness of the the allotee i.e. failed to prove identity and creditworthiness of the the allotee i.e. failed to prove identity and creditworthiness of the the allotee i.e. Matrix Partners India Investment Matrix Partners India Investment Holdings II, LLC to whom the Holdings II, LLC to whom the shares were allotted in previous year 2012 shares were allotted in previous year 2012-12 5. On the facts and circumstances of the case and in law, the Ld 5. On the facts and circumstances of the case and in law, the Ld 5. On the facts and circumstances of the case and in law, the Ld CIT(A)and the Ld. AO erred in doubting the genuineness of the CIT(A)and the Ld. AO erred in doubting the genuineness of the CIT(A)and the Ld. AO erred in doubting the genuineness of the transaction of issue of shares of Rs. 15,00,00,001 onl transaction of issue of shares of Rs. 15,00,00,001 onl transaction of issue of shares of Rs. 15,00,00,001 only to the extent of share premium of Rs. 14,99,57,141/ extent of share premium of Rs. 14,99,57,141/-, without doubting , without doubting the genuineness of the remainder amount being face value of the genuineness of the remainder amount being face value of the genuineness of the remainder amount being face value of shares of Rs. 42,860/ shares of Rs. 42,860/-.
6. On the facts and circumstances of the case and in law, the Ld 6. On the facts and circumstances of the case and in law, the Ld 6. On the facts and circumstances of the case and in law, the Ld CIT(A) has grossly erred in conclu CIT(A) has grossly erred in concluding that the appellant has ding that the appellant has introduced its own unaccounted money of Rs. 14,99,57,141 as introduced its own unaccounted money of Rs. 14,99,57,141 as introduced its own unaccounted money of Rs. 14,99,57,141 as share premium solely for the reason that shares have been alloted share premium solely for the reason that shares have been alloted share premium solely for the reason that shares have been alloted to the entity incorporated and registered in Mauritius which is a to the entity incorporated and registered in Mauritius which is a to the entity incorporated and registered in Mauritius which is a tax haven country. tax haven country.
7. On the facts a 7. On the facts and circumstances of the case and in law, the Ld nd circumstances of the case and in law, the Ld CIT(A) and the Ld AO have grossly erred in concluding that the CIT(A) and the Ld AO have grossly erred in concluding that the CIT(A) and the Ld AO have grossly erred in concluding that the transaction of receipt of share premium of Rs. 14,99,57,141 is a transaction of receipt of share premium of Rs. 14,99,57,141 is a transaction of receipt of share premium of Rs. 14,99,57,141 is a sham transaction whilst accepting the genuineness of the sham transaction whilst accepting the genuineness of the sham transaction whilst accepting the genuineness of the remainder part of the s remainder part of the same transaction i.e. receipt of face value of ame transaction i.e. receipt of face value of shares Rs. 42,860/ 42,860/-.
At the very outset outset, our attention was invited by the learned , our attention was invited by the learned counsel for the assessee to the defect memo issued by the Registry counsel for the assessee to the defect memo issued by the Registry counsel for the assessee to the defect memo issued by the Registry noting a delay of 209 days in the filing of the present appeal. The noting a delay of 209 days in the filing of the present ap noting a delay of 209 days in the filing of the present ap learned counsel drew support from the assessee’s application for learned counsel drew support from the assessee’s application for learned counsel drew support from the assessee’s application for condonation of delay, duly affirmed by an affidavit. condonation of delay, duly affirmed by an affidavit.
2.1 In the said affidavit, the Director of the assessee In the said affidavit, the Director of the assessee In the said affidavit, the Director of the assessee-company explained that she has, for several years, been the sole person explained that she has, for several years, been the sole person explained that she has, for several years, been the sole person managing the affairs of the company. She further deposed that, managing the affairs of the company. She further deposed that, managing the affairs of the company. She further deposed that, being a single mother entrusted with the care of a special-needs being a single mother entrusted with the care of a special being a single mother entrusted with the care of a special child, she was compelled, owing to exigencies of her son’s health child, she was compelled, owing to exigencies of her son’s health child, she was compelled, owing to exigencies of her son’s health and specialised training requirements, to relocate from Mumbai to and specialised training requirements, to relocate from Mumbai and specialised training requirements, to relocate from Mumbai Dehradun in March 2024. It was stated that this unavoidable shift, Dehradun in March 2024. It was stated that this unavoidable shift, Dehradun in March 2024. It was stated that this unavoidable shift, coupled with her personal responsibilities, resulted in diminished coupled with her personal responsibilities, resulted in diminished coupled with her personal responsibilities, resulted in diminished attention to the routine administration of the company. attention to the routine administration of the company. attention to the routine administration of the company.
2.2 It was further submitted that the assessee harboured the b It was further submitted that the assessee harboured the b It was further submitted that the assessee harboured the bona fide belief that the appellate order would be served either physically fide belief that the appellate order would be served either physically fide belief that the appellate order would be served either physically or through e-mail, and was unaware that the impugned order had mail, and was unaware that the impugned order had mail, and was unaware that the impugned order had been uploaded on the portal. been uploaded on the portal.
2.3 Further it is submitted that for early disposal of the appeal, Further it is submitted that for early disposal of the appeal, Further it is submitted that for early disposal of the appeal, the assessee had file the assessee had filed writ petition before Hon’ble Bombay High before Hon’ble Bombay High Court but there also it was not intimated that order was already there also it was not intimated that order was already there also it was not intimated that order was already disposed off. The assessee came to know of the disposal of the The assessee came to know of the disposal of the The assessee came to know of the disposal of the appeal only on 20.12.2024 upon receiving an e appeal only on 20.12.2024 upon receiving an e-mail from the ACIT, mail from the ACIT, NFAC, whereafter the order was downloaded and the appeal was whereafter the order was downloaded and the appeal was whereafter the order was downloaded and the appeal was promptly filed, resulting in the delay now under consideration. The promptly filed, resulting in the delay now under consideration. The promptly filed, resulting in the delay now under consideration. The learned counsel accordingly prayed that, in view of the peculiar and learned counsel accordingly prayed that, in view of the peculiar and learned counsel accordingly prayed that, in view of the peculiar and compelling circumstances, the delay be condoned. compelling circumstances, the delay be condoned..
The Ld. Departmental Representative (DR) on the other hand epartmental Representative (DR) on the other hand epartmental Representative (DR) on the other hand opposed condonation of the delay. opposed condonation of the delay.
We have given our thoughtful consideration to the rival We have given our thoughtful consideration to the rival We have given our thoughtful consideration to the rival submissions and perused the material placed on record. The submissions and perused the material placed on record. The submissions and perused the material placed on record. The statutory scheme mandates that an appeal before the Tribunal is statutory scheme mandates that an appeal before the T statutory scheme mandates that an appeal before the T ordinarily to be filed within sixty days of the date of communication ordinarily to be filed within sixty days of the date of communication ordinarily to be filed within sixty days of the date of communication of the order of the learned CIT(A) or of the date on which the order of the order of the learned CIT(A) or of the date on which the order of the order of the learned CIT(A) or of the date on which the order comes to the knowledge of the assessee, whichever is earlier. comes to the knowledge of the assessee, whichever is earlier. comes to the knowledge of the assessee, whichever is earlier. However, where sufficient cause is demonstra However, where sufficient cause is demonstrated for the delay, the ted for the delay, the Tribunal is empowered to condone such delay in furtherance of Tribunal is empowered to condone such delay in furtherance of Tribunal is empowered to condone such delay in furtherance of substantial justice.
4.1 The principles governing condonation are well settled by the The principles governing condonation are well settled by the The principles governing condonation are well settled by the judgment of the Hon’ble Supreme Court in Collector, Land judgment of the Hon’ble Supreme Court in judgment of the Hon’ble Supreme Court in Acquisition v. Mst. Katiji & Acquisition v. Mst. Katiji & Ors. (167 ITR 471), wherein the Court (167 ITR 471), wherein the Court emphasised emphasised emphasised that that that when when when substantial substantial substantial justice justice justice and and and technical technical technical considerations are pitted against each other, the former must considerations are pitted against each other, the former must considerations are pitted against each other, the former must prevail. The test is not the length of delay but the acceptability of prevail. The test is not the length of delay but the acceptability of prevail. The test is not the length of delay but the acceptability of the explanation. In the instan In the instant case, the relevant submission filed t case, the relevant submission filed by the assessee is reproduced as under: by the assessee is reproduced as under:
6. Since 2019, the Appellant Company is being solely managed Since 2019, the Appellant Company is being solely managed Since 2019, the Appellant Company is being solely managed by Ms Niyateey Shah. Though the Appellant at one point of time by Ms Niyateey Shah. Though the Appellant at one point of time by Ms Niyateey Shah. Though the Appellant at one point of time had more than 100 employees, due to disputes amongst t had more than 100 employees, due to disputes amongst t had more than 100 employees, due to disputes amongst the promoters/ key management personnel since 2019, currently the promoters/ key management personnel since 2019, currently the promoters/ key management personnel since 2019, currently the company is manned by less than 5 people. company is manned by less than 5 people.
Ms Shah, a single mother with a special needs child. Her son 7. Ms Shah, a single mother with a special needs child. Her son 7. Ms Shah, a single mother with a special needs child. Her son diagnosed with Down Syndrome, had developed some interest in diagnosed with Down Syndrome, had developed some interest in diagnosed with Down Syndrome, had developed some interest in sports. She had to sports. She had to relocate to Dehradun from Mumbai, in March relocate to Dehradun from Mumbai, in March 2024, to provide for his needs special training and treatment. Her 2024, to provide for his needs special training and treatment. Her 2024, to provide for his needs special training and treatment. Her personal attention on a day to day basis towards his son's personal attention on a day to day basis towards his son's personal attention on a day to day basis towards his son's training well being and training, lead to her son training well being and training, lead to her son (i) September 2024 (i) September 2024-Gold medal at the Asian Powerlifting Asian Powerlifting Championship Bench Press in Bishkek, Kyrgyzstan Championship Bench Press in Bishkek, Kyrgyzstan (ii) October 2024 Gold medal at the Commonwealth Classic & (ii) October 2024 Gold medal at the Commonwealth Classic & (ii) October 2024 Gold medal at the Commonwealth Classic & Equipped Powerlifting Championship in Sun City, South Africa Equipped Powerlifting Championship in Sun City, South Africa Equipped Powerlifting Championship in Sun City, South Africa (iii) November 2024 (iii) November 2024 - Silver medal in squat, Bronze medal in Silver medal in squat, Bronze medal in deadlift, and an overall Bronze medal at the IPF World Open , and an overall Bronze medal at the IPF World Open , and an overall Bronze medal at the IPF World Open Powerlifting Championship in Iceland. Powerlifting Championship in Iceland. (iv) December 2024 (iv) December 2024 - Overall Gold medal at the Asian Powerlifting Overall Gold medal at the Asian Powerlifting Championship in Tashkent, Uzbekistan, Championship in Tashkent, Uzbekistan, 8. Ms Shah's requirement of being with her son during the 8. Ms Shah's requirement of being with her son during the 8. Ms Shah's requirement of being with her son during the intense training schedule with started from January 2024 and nse training schedule with started from January 2024 and nse training schedule with started from January 2024 and her shifting to Dehradun in April 2024, resulted in Ms Shah's her shifting to Dehradun in April 2024, resulted in Ms Shah's her shifting to Dehradun in April 2024, resulted in Ms Shah's minimal minimal minimal involvement involvement involvement in in in administration administration administration of of of the the the Appellant Appellant Appellant Company's administration. As there was no one else who Company's administration. As there was no one else who Company's administration. As there was no one else who monitored and managed the f monitored and managed the financial position of the company, till inancial position of the company, till 20th December 2024 (when the Assessing Officer intimated the 20th December 2024 (when the Assessing Officer intimated the 20th December 2024 (when the Assessing Officer intimated the Appellant about the impugned order), she was unaware about Appellant about the impugned order), she was unaware about Appellant about the impugned order), she was unaware about the impugned order having been passed. the impugned order having been passed. 9. Within 10 days of the impugned order coming to her 9. Within 10 days of the impugned order coming to her 9. Within 10 days of the impugned order coming to her knowledge, the appeal being filed before the Hon'ble Tribunal. ledge, the appeal being filed before the Hon'ble Tribunal. ledge, the appeal being filed before the Hon'ble Tribunal. B. The Appellant was under a reasonable belief that the appeal B. The Appellant was under a reasonable belief that the appeal B. The Appellant was under a reasonable belief that the appeal would be disposed off by serving a copy of the order to the would be disposed off by serving a copy of the order to the would be disposed off by serving a copy of the order to the Appellant, physically, or through e Appellant, physically, or through e-mail. The Appellant was mail. The Appellant was unaware about unaware about the order being uploaded on the online portal, till the order being uploaded on the online portal, till 20th December 2024. 20th December 2024. 10. The Appellant had duly participated in the appellate 10. The Appellant had duly participated in the appellate 10. The Appellant had duly participated in the appellate proceedings before the NFAC, and also furnished its written proceedings before the NFAC, and also furnished its written proceedings before the NFAC, and also furnished its written submissions, and reply to remand report, submissions, and reply to remand report,
The Appellant was unde 11. The Appellant was under a reasonable belief that the appeal r a reasonable belief that the appeal would be disposed off by serving a physical copy of the appeal would be disposed off by serving a physical copy of the appeal would be disposed off by serving a physical copy of the appeal on the Appellant, or by serving a copy over e on the Appellant, or by serving a copy over e-mail. Being the mail. Being the initial period of the operation of the Faceless Appeal Scheme, the initial period of the operation of the Faceless Appeal Scheme, the initial period of the operation of the Faceless Appeal Scheme, the Appellant was unaware that Appellant was unaware that the Appellate Order would be the Appellate Order would be served by uploading it on the portal, and not by physically served by uploading it on the portal, and not by physically served by uploading it on the portal, and not by physically serving a copy of the order on the Appellant. The impugned order serving a copy of the order on the Appellant. The impugned order serving a copy of the order on the Appellant. The impugned order dated 21st March 2024, came to the knowledge of the Appellant dated 21st March 2024, came to the knowledge of the Appellant dated 21st March 2024, came to the knowledge of the Appellant only 20th December 2024. only 20th December 2024.
Infact, the appellant had, on 21 February 2024 and 24th July he appellant had, on 21 February 2024 and 24th July he appellant had, on 21 February 2024 and 24th July 2024, filed applications with the NFAC for early disposal of the 2024, filed applications with the NFAC for early disposal of the 2024, filed applications with the NFAC for early disposal of the appeal [Copy of these letters are enclosed herewith as Exhibit A). appeal [Copy of these letters are enclosed herewith as Exhibit A). appeal [Copy of these letters are enclosed herewith as Exhibit A). As the Appellant did not receive any response, the Appellant As the Appellant did not receive any response, the Appellant As the Appellant did not receive any response, the Appellant even filed a Writ Petition No. 4725 of 2024 before the Hon'ble a Writ Petition No. 4725 of 2024 before the Hon'ble a Writ Petition No. 4725 of 2024 before the Hon'ble Bombay High Court on 01 October 2024. The Hon'ble Bombay Bombay High Court on 01 October 2024. The Hon'ble Bombay Bombay High Court on 01 October 2024. The Hon'ble Bombay High Court vide order dated 18th November 2024 [Copy of order High Court vide order dated 18th November 2024 [Copy of order High Court vide order dated 18th November 2024 [Copy of order dated 18th November 2024 is enclosed herewith as Exhibit B] dated 18th November 2024 is enclosed herewith as Exhibit B] dated 18th November 2024 is enclosed herewith as Exhibit B] disposed off the petition disposed off the petition with a direction to the Commissioner with a direction to the Commissioner (Appeals) to dispose of the appeal within 3 months without any (Appeals) to dispose of the appeal within 3 months without any (Appeals) to dispose of the appeal within 3 months without any further extension. Though the Revenue was represented in the further extension. Though the Revenue was represented in the further extension. Though the Revenue was represented in the Writ Petition, it was never brough to the notice of the Court or the Writ Petition, it was never brough to the notice of the Court or the Writ Petition, it was never brough to the notice of the Court or the Appellant that the appeal Appellant that the appeal was disposed off.
Thereafter, the Appellant served the certified copy of the 13. Thereafter, the Appellant served the certified copy of the 13. Thereafter, the Appellant served the certified copy of the Hon'ble Bombay High Court's order dated 18th November 2024 Hon'ble Bombay High Court's order dated 18th November 2024 Hon'ble Bombay High Court's order dated 18th November 2024 with with with the the the National Faceless National Faceless National Faceless Appeal Centre Appeal Centre Appeal Centre as as as well well well as as as Jurisdictional Assessing Officer on 19th December 2024. Jurisdictional Assessing Officer on 19th December 2024. Jurisdictional Assessing Officer on 19th December 2024. Thereafter, on 20th December 2024, the Appellant received an e Thereafter, on 20th December 2024, the Appellant received an e Thereafter, on 20th December 2024, the Appellant received an e- mail from ACIT, NFAC, wherein it was stated that: mail from ACIT, NFAC, wherein it was stated that: "As per the information received from ITBA team (DG System), the "As per the information received from ITBA team (DG System), the "As per the information received from ITBA team (DG System), the appeal of M/s Shot Formats Digital Productions Pvt Ltd for AY appeal of M/s Shot Formats Digital Productions Pvt Ltd for AY appeal of M/s Shot Formats Digital Productions Pvt Ltd for AY 2013-14 has been 14 has been disposed off on 21.03.2024" Copy of order dated 18th November 2024 is enclosed herewith as Copy of order dated 18th November 2024 is enclosed herewith as Copy of order dated 18th November 2024 is enclosed herewith as Exhibit C. 14, Thus it is only on 20 December 2024, that the Appellant 14, Thus it is only on 20 December 2024, that the Appellant 14, Thus it is only on 20 December 2024, that the Appellant became aware that the appeal before the Commissioner (Appeals) became aware that the appeal before the Commissioner (Appeals) became aware that the appeal before the Commissioner (Appeals) was disposed off on 21 March 2 was disposed off on 21 March 2024. Thereafter, the Appellant 024. Thereafter, the Appellant accessed its e accessed its e-filing portal and downloaded the order dated 21 filing portal and downloaded the order dated 21 March 2024 passed by the NFAC u/s 250 of the Act. March 2024 passed by the NFAC u/s 250 of the Act. 15. The Appellant states and submits that it not received any 15. The Appellant states and submits that it not received any 15. The Appellant states and submits that it not received any communication through e communication through e- mails or whatsoever from mails or whatsoever from the Income Tax Department that its appeal for AY 2013 Tax Department that its appeal for AY 2013-14 had been 14 had been disposed off. That is the reason the Appellant followed up disposed off. That is the reason the Appellant followed up disposed off. That is the reason the Appellant followed up multiple times for early hearing of appeal as well as took pains to multiple times for early hearing of appeal as well as took pains to multiple times for early hearing of appeal as well as took pains to file writ petition before the Hon'ble Bombay High Court. file writ petition before the Hon'ble Bombay High Court. file writ petition before the Hon'ble Bombay High Court.
The appellant humbly requests that the delay of 22, days' in e appellant humbly requests that the delay of 22, days' in e appellant humbly requests that the delay of 22, days' in filing the present appeal may be condoned having regard to the filing the present appeal may be condoned having regard to the filing the present appeal may be condoned having regard to the facts narrated above and bonafides of facts narrated above and bonafides of the appellant. 4.2 In the present case, the assessee has set out, in considerable n the present case, the assessee has set out, in considerable n the present case, the assessee has set out, in considerable detail, circumstances which convincingly explain the delay. The stances which convincingly explain the delay. The stances which convincingly explain the delay. The Director, being a single parent to a special Director, being a single parent to a special-needs child undergoing needs child undergoing intensive sports and therapeutic training, was constrained to intensive sports and therapeutic training, was constrained to intensive sports and therapeutic training, was constrained to relocate, thereby severely limiting her involvement in the company’s relocate, thereby severely limiting her involvement in the company’s relocate, thereby severely limiting her involvement in the company’s administrative affairs. The affidavit also narrates the assessee’s trative affairs. The affidavit also narrates the assessee’s trative affairs. The affidavit also narrates the assessee’s bona fide but mistaken belief regarding the mode of communication bona fide but mistaken belief regarding the mode of communication bona fide but mistaken belief regarding the mode of communication of orders under the nascent Faceless Appeal Scheme. of orders under the nascent Faceless Appeal Scheme. of orders under the nascent Faceless Appeal Scheme.
4.3 It further emerges that the assessee had, in fact, been It further emerges that the assessee had, in fact, been It further emerges that the assessee had, in fact, been g the matter by filing applications for early diligently pursuing the matter by filing applications for early g the matter by filing applications for early disposal and even approaching the Hon’ble Bombay High Court by disposal and even approaching the Hon’ble Bombay High Court by disposal and even approaching the Hon’ble Bombay High Court by way of a writ petition. Significantly, despite Revenue’s participation way of a writ petition. Significantly, despite Revenue’s participation way of a writ petition. Significantly, despite Revenue’s participation before the High Court, neither was the disposal of the appeal before the High Court, neither was the disposal of the appeal before the High Court, neither was the disposal of the appeal brought to the Court’s notice nor communicated to the assessee. Court’s notice nor communicated to the assessee. Court’s notice nor communicated to the assessee. The fact that the assessee came to know of the order only upon an The fact that the assessee came to know of the order only upon an The fact that the assessee came to know of the order only upon an e-mail received on 20.12.2024 stands uncontroverted, as the mail received on 20.12.2024 stands uncontroverted, as the mail received on 20.12.2024 stands uncontroverted, as the Revenue has filed no counter Revenue has filed no counter-affidavit disputing the factual affidavit disputing the factual assertions.
4.4 The appeal was filed within ten days of the assessee acquiring appeal was filed within ten days of the assessee acquiring appeal was filed within ten days of the assessee acquiring knowledge of the impugned order. Such prompt action reinforces knowledge of the impugned order. Such prompt action reinforces knowledge of the impugned order. Such prompt action reinforces the bona fides of the explanation. the bona fides of the explanation.
4.5 In view of the foregoing discussion, and noting that the In view of the foregoing discussion, and noting that the In view of the foregoing discussion, and noting that the explanation furnished by the assessee explanation furnished by the assessee remains unrebutted and remains unrebutted and demonstrates sufficient cause within the meaning of law, we are demonstrates sufficient cause within the meaning of law, we are demonstrates sufficient cause within the meaning of law, we are satisfied that this is a fit case where technicalities must yield to satisfied that this is a fit case where technicalities must yield to satisfied that this is a fit case where technicalities must yield to substantial justice. Accordingly, we accept the explanation tendered substantial justice. Accordingly, we accept the explanation tendered substantial justice. Accordingly, we accept the explanation tendered and condone the delay condone the delay in filing the appeal.
4.6 The appeal is thus admitted and taken up for adjudication on The appeal is thus admitted and taken up for adjudication on The appeal is thus admitted and taken up for adjudication on merits.
We have carefully heard the rival submissions and perused the We have carefully heard the rival submissions and perused the We have carefully heard the rival submissions and perused the material brought on record. The factual matrix reveals that the material brought on record. The factual matrix reveals that the material brought on record. The factual matrix reveals that the assessee filed its return of income on 30.09.2013 declaring a total assessee filed its return of income on 30.09.2013 declaring a total assessee filed its return of income on 30.09.2013 declaring a total income of ₹7,62,78,710/ 7,62,78,710/-, which was subsequently revised on , which was subsequently revised on 12.03.2015 to ₹2,11,76,330/ 2,11,76,330/-. The return was selected for scrutiny, . The return was selected for scrutiny, and during the course of assessment proceedings, the assessee was and during the course of assessment proceedings, the assessee was and during the course of assessment proceedings, the assessee was unable to satisfactorily demonstrate the justification for receipt of a unable to satisfactorily demonstrate the justification for receipt of a unable to satisfactorily demonstrate the justification for receipt of a share premium of ₹3,45,987.67 per share from an enti share premium of 3,45,987.67 per share from an entity incorporated in Mauritius. incorporated in Mauritius.
5.1 The Assessing Officer recorded that the financial statements of he Assessing Officer recorded that the financial statements of he Assessing Officer recorded that the financial statements of the investor-company were not furnished, nor was the assessee able company were not furnished, nor was the assessee able company were not furnished, nor was the assessee able to substantiate, through any credible material, the basis of arriving to substantiate, through any credible material, the basis of arriving to substantiate, through any credible material, the basis of arriving at such an extraordin at such an extraordinary valuation under the Discounted Cash ary valuation under the Discounted Cash Flow (DCF) Method or otherwise. The Assessing Officer, therefore, Flow (DCF) Method or otherwise. The Assessing Officer, therefore, Flow (DCF) Method or otherwise. The Assessing Officer, therefore, held that the assessee had failed to discharge the burden of proving held that the assessee had failed to discharge the burden of proving held that the assessee had failed to discharge the burden of proving the the the identity, identity, identity, creditworthiness creditworthiness creditworthiness of of of the the the subscriber, subscriber, subscriber, and and and the the the genuineness of the tran genuineness of the transaction, and invoked the provisions of saction, and invoked the provisions of section 68 of the Act, making an addition of the impugned premium section 68 of the Act, making an addition of the impugned premium section 68 of the Act, making an addition of the impugned premium amount. The relevant observation of the Assessing Officer is The relevant observation of the Assessing Officer is The relevant observation of the Assessing Officer is reproduced as under: reproduced as under:
“4.15 On the basis of the language used under section 68 and the 4.15 On the basis of the language used under section 68 and the 4.15 On the basis of the language used under section 68 and the various decisions of different High Courts and the apex court, the ous decisions of different High Courts and the apex court, the ous decisions of different High Courts and the apex court, the only conclusion which could be arrived at is: only conclusion which could be arrived at is: i. That the burden to prove the identity, capacity and genuineness i. That the burden to prove the identity, capacity and genuineness i. That the burden to prove the identity, capacity and genuineness has to be on the assessee. has to be on the assessee. ii. If the cash credit is not satisfactorily explaine ii. If the cash credit is not satisfactorily explained the Income d the Income-tax Officer is justified to treat it as income from "undisclosed sources". Officer is justified to treat it as income from "undisclosed sources". Officer is justified to treat it as income from "undisclosed sources". The assessee has to establish that the amount was actually given The assessee has to establish that the amount was actually given The assessee has to establish that the amount was actually given by the lender, by the lender, iv. The genuineness and regularity in the maintenance of the iv. The genuineness and regularity in the maintenance of the iv. The genuineness and regularity in the maintenance of the account has to be taken int account has to be taken into consideration by the taxing authorities, o consideration by the taxing authorities, v. If the explanation is not supported by any documentary or other . If the explanation is not supported by any documentary or other . If the explanation is not supported by any documentary or other evidence, evidence, evidence, then then then the the the deeming deeming deeming fiction fiction fiction created created created by by by section section section 68 can be invoked. invoked.” 5.2 The learned CIT(A), upon a detailed examination, concurred The learned CIT(A), upon a detailed examination, concurred The learned CIT(A), upon a detailed examination, concurred with the findings of the Assessing Officer. The appellate authority with the findings of the Assessing Officer. The appellate authority with the findings of the Assessing Officer. The appellate authority noted that despite multiple opportunities, both during assessment noted that despite multiple opportunities, both during assessment noted that despite multiple opportunities, both during assessment and remand proceedings, the assessee was unable to provide any and remand proceedings, the assessee was unable to provide any and remand proceedings, the assessee was unable to provide any cogent explanation or verifiable evidence to demonstrate how a cogent explanation or verifiable evidence to demonstrate how a cogent explanation or verifiable evidence to demonstrate how a share of face value ₹10/ could command a premium of ₹34,987.67 10/- could command a premium of per share, particularly from an entity situated in a tax-haven per share, particularly from an entity situated in a tax per share, particularly from an entity situated in a tax jurisdiction. The CIT(A) further observed that the valuation reports jurisdiction. The CIT(A) further observed that the valuation repor jurisdiction. The CIT(A) further observed that the valuation repor furnished by the assessee were unaccompanied by supporting furnished by the assessee were unaccompanied by supporting furnished by the assessee were unaccompanied by supporting material to establish the veracity of future cash material to establish the veracity of future cash-flow projections flow projections and, therefore, did not inspire confidence. Relying on binding and, therefore, did not inspire confidence. Relying on binding and, therefore, did not inspire confidence. Relying on binding judicial precedents, including the decision of the Hon’ble Bombay judicial precedents, including the decision of the Hon’ble Bomba judicial precedents, including the decision of the Hon’ble Bomba High Court in Major Metals Ltd. Major Metals Ltd., the CIT(A) upheld the addition as a , the CIT(A) upheld the addition as a transaction lacking genuineness and being in the nature of transaction lacking genuineness and being in the nature of transaction lacking genuineness and being in the nature of introduction of unaccounted money through the colourable device introduction of unaccounted money through the colourable device introduction of unaccounted money through the colourable device of share premium. of share premium. The relevant observations of ld CIT(A) are The relevant observations of ld CIT(A) are reproduced as under: as under:
Finding of the case and decision: Finding of the case and decision:- I have carefully considered the I have carefully considered the facts of the case, finding of the AO in the assessment order, facts of the case, finding of the AO in the assessment order, facts of the case, finding of the AO in the assessment order, submission of the appellant, observations made by the AO in the submission of the appellant, observations made by the AO in the submission of the appellant, observations made by the AO in the remand report, rejoinder of the remand report, rejoinder of the appellant and material placed on appellant and material placed on record. From facts of the case it is noticed that in this case the record. From facts of the case it is noticed that in this case the record. From facts of the case it is noticed that in this case the return of income was e return of income was e-filed by the assessee company on filed by the assessee company on 30.09.2013, declaring total income of Rs. 7,62,78,710/ 30.09.2013, declaring total income of Rs. 7,62,78,710/ 30.09.2013, declaring total income of Rs. 7,62,78,710/-. Thereafter the assessee company had field r the assessee company had field revised return of income on evised return of income on 12.03.2015, declaring total income of Rs. 2,11,76,330/ 12.03.2015, declaring total income of Rs. 2,11,76,330/ 12.03.2015, declaring total income of Rs. 2,11,76,330/-. The case was selected for scrutiny through CASS, therefore, the notices u/s was selected for scrutiny through CASS, therefore, the notices u/s was selected for scrutiny through CASS, therefore, the notices u/s 143(2)/ 142(1) along with detailed questionnaires were issued. On 143(2)/ 142(1) along with detailed questionnaires were issued. On 143(2)/ 142(1) along with detailed questionnaires were issued. On perusal of balance sheet the A perusal of balance sheet the AO noticed that t he appellant had O noticed that t he appellant had issued the preference shares of face value of Rs.10/ issued the preference shares of face value of Rs.10/ issued the preference shares of face value of Rs.10/- numbering 4186 shares, at premium of Rs. 34,987.67/ 4186 shares, at premium of Rs. 34,987.67/- per share, to M/s per share, to M/s Matrix Partners India investment Holdings II LLC, having its Matrix Partners India investment Holdings II LLC, having its Matrix Partners India investment Holdings II LLC, having its registered office in Mauritius. Duri registered office in Mauritius. During the course of assessment ng the course of assessment proceedings the AO doubted the genuineness of transactions related proceedings the AO doubted the genuineness of transactions related proceedings the AO doubted the genuineness of transactions related to the share premium of Rs.14,99,57,141/ to the share premium of Rs.14,99,57,141/-, received from the above , received from the above company, therefore, issued the detailed questionnaire, asking for company, therefore, issued the detailed questionnaire, asking for company, therefore, issued the detailed questionnaire, asking for relevant information, to asc relevant information, to ascertain the basis of valuation of share, for ertain the basis of valuation of share, for receiving huge amount of premium i.e., Rs. 34,987.67/ receiving huge amount of premium i.e., Rs. 34,987.67/ receiving huge amount of premium i.e., Rs. 34,987.67/- per share, that to from the company which is registered in Mauritius that to from the company which is registered in Mauritius that to from the company which is registered in Mauritius-i.e. tax haven country. haven country.
7.1 In compliance the appellant could not demonstrate as how com 7.1 In compliance the appellant could not demonstrate as how com 7.1 In compliance the appellant could not demonstrate as how come the share, having face value of Rs. 10/ the share, having face value of Rs. 10/-, could fetch premium of Rs. , could fetch premium of Rs. 34,987.67/- per share, that to from the company which is registered per share, that to from the company which is registered per share, that to from the company which is registered in Mauritius- tax haven country. The appellant was given ample tax haven country. The appellant was given ample opportunity of being heard by the AO during assessment opportunity of being heard by the AO during assessment opportunity of being heard by the AO during assessment as well as remand proceeding, to justify the genuineness of share premium of remand proceeding, to justify the genuineness of share premium of remand proceeding, to justify the genuineness of share premium of Rs. 14,99,57,141/ Rs. 14,99,57,141/-, received from the company which is registered , received from the company which is registered in Mauritius. The appellant however, could not bring any credible in Mauritius. The appellant however, could not bring any credible in Mauritius. The appellant however, could not bring any credible material evidence and logical justification on material evidence and logical justification on record, either before record, either before AO or during appellate proceeding, by which one can understand AO or during appellate proceeding, by which one can understand AO or during appellate proceeding, by which one can understand the logic/ basis to arrive at the premium of Rs. 34,987.67/ the logic/ basis to arrive at the premium of Rs. 34,987.67/ the logic/ basis to arrive at the premium of Rs. 34,987.67/- per share. The Appellant had placed reliance on rulings of various share. The Appellant had placed reliance on rulings of various share. The Appellant had placed reliance on rulings of various Hon'ble Courts, whose facts and circumstan Hon'ble Courts, whose facts and circumstances are not exactly ces are not exactly matching with the fact of the case under consideration. matching with the fact of the case under consideration. matching with the fact of the case under consideration. 7.2 It is also to be noted that the appellant had arranged the above 7.2 It is also to be noted that the appellant had arranged the above 7.2 It is also to be noted that the appellant had arranged the above transaction from entity which is based in the Mauritius, itself transaction from entity which is based in the Mauritius, itself transaction from entity which is based in the Mauritius, itself indicate the fact that the appellant had given indicate the fact that the appellant had given the color of share the color of share premium to this transaction, to justify the introduction of its own premium to this transaction, to justify the introduction of its own premium to this transaction, to justify the introduction of its own unaccounted amount of Rs. 14,99,57,141/ unaccounted amount of Rs. 14,99,57,141/-, under the garb of share , under the garb of share premium money. During the course of appellate proceedings the premium money. During the course of appellate proceedings the premium money. During the course of appellate proceedings the appellant merely stated that appellant merely stated that- " the appellant had filed valuation lant had filed valuation report based on DCF method and also a valuation statement based report based on DCF method and also a valuation statement based report based on DCF method and also a valuation statement based on PECV method. The value as per DCF method was Rs. 30,035 per on PECV method. The value as per DCF method was Rs. 30,035 per on PECV method. The value as per DCF method was Rs. 30,035 per share while the value as per PECV method was Rs. 36,450 per share while the value as per PECV method was Rs. 36,450 per share while the value as per PECV method was Rs. 36,450 per share. The learned DCIT share. The learned DCIT has chosen to ignore them all together e them all together without assigning any reasons whatsoever. Valuation as per DCF without assigning any reasons whatsoever. Valuation as per DCF without assigning any reasons whatsoever. Valuation as per DCF method takes into account the future cash flows based on method takes into account the future cash flows based on method takes into account the future cash flows based on projections of future revenues and profit of the business. In projections of future revenues and profit of the business. In projections of future revenues and profit of the business. In determining the value as per DCF method, the valuer ha determining the value as per DCF method, the valuer ha determining the value as per DCF method, the valuer has considered future revenue and profit for the years 2013 to 2016. It considered future revenue and profit for the years 2013 to 2016. It considered future revenue and profit for the years 2013 to 2016. It is submitted that the projection of future revenue and o profit was is submitted that the projection of future revenue and o profit was is submitted that the projection of future revenue and o profit was done on reasonable and scientific basis........ done on reasonable and scientific basis........ 7.3 The above contention of the appellant is based on his own logic 7.3 The above contention of the appellant is based on his own logic 7.3 The above contention of the appellant is based on his own logic and method of valuation to arrive at above values i.e. by DCF d method of valuation to arrive at above values i.e. by DCF d method of valuation to arrive at above values i.e. by DCF method at Rs. 30,035 and as per PECV method Rs. 36,450 per method at Rs. 30,035 and as per PECV method Rs. 36,450 per method at Rs. 30,035 and as per PECV method Rs. 36,450 per share, which was not accepted by the AO in the absence of any share, which was not accepted by the AO in the absence of any share, which was not accepted by the AO in the absence of any credible material evidence and logical justification on record. In view credible material evidence and logical justification on record. In view credible material evidence and logical justification on record. In view of these facts it is held that the entire amount of share premium of these facts it is held that the entire amount of share premium of these facts it is held that the entire amount of share premium of Rs.14,99,57,141/ Rs.14,99,57,141/-, received from M/s Matrix Partners India , received from M/s Matrix Partners India investment Holdings II LLC, having its registered office in Mauritius, investment Holdings II LLC, having its registered office in Mauritius, investment Holdings II LLC, having its registered office in Mauritius, is dubious in nature and design to introduce its own unaccou is dubious in nature and design to introduce its own unaccou is dubious in nature and design to introduce its own unaccounted money under the garb of share premium, in its books of account, money under the garb of share premium, in its books of account, money under the garb of share premium, in its books of account, from the tax heaven country, which can't be subjected to any from the tax heaven country, which can't be subjected to any from the tax heaven country, which can't be subjected to any verification/cross check. Considering these facts the AO held that verification/cross check. Considering these facts the AO held that verification/cross check. Considering these facts the AO held that the entire amount of share premium of Rs.14,99,57,141/ the entire amount of share premium of Rs.14,99,57,141/ the entire amount of share premium of Rs.14,99,57,141/-, received from M/s Matrix Partners India investment Holdings II LLC, as from M/s Matrix Partners India investment Holdings II LLC, as from M/s Matrix Partners India investment Holdings II LLC, as shame transaction and therefore added to the income of the shame transaction and therefore added to the income of the shame transaction and therefore added to the income of the appellant, by giving detailed findings in the assessment order. In appellant, by giving detailed findings in the assessment order. In appellant, by giving detailed findings in the assessment order. In this regard, the AO had placed the reliance on rulings in the this regard, the AO had placed the reliance on rulings in the this regard, the AO had placed the reliance on rulings in the followings cases: followings cases:- 7.4 In the case of M/s Sreelekha Banerji vs CIT[49 ITR 1129 (SC)] 7.4 In the case of M/s Sreelekha Banerji vs CIT[49 ITR 1129 (SC)] 7.4 In the case of M/s Sreelekha Banerji vs CIT[49 ITR 1129 (SC)] the Hon'ble Supreme Court has held that the addition for the Hon'ble Supreme Court has held that the addition for the Hon'ble Supreme Court has held that the addition for unexplained cash credit is justified simply if the assessee fails to unexplained cash credit is justified simply if the assessee fails to unexplained cash credit is justified simply if the assessee fails to offer an explanation or the explanation offe offer an explanation or the explanation offered by the assessee is red by the assessee is found to be not satisfactory by the assessing officer. On identical found to be not satisfactory by the assessing officer. On identical found to be not satisfactory by the assessing officer. On identical facts, the Hon'ble Bombay High Court, in case of Major Metals Ltd. facts, the Hon'ble Bombay High Court, in case of Major Metals Ltd. facts, the Hon'ble Bombay High Court, in case of Major Metals Ltd. Vs. Union of India [207 Taxmann.com 185], upheld the addition of Vs. Union of India [207 Taxmann.com 185], upheld the addition of Vs. Union of India [207 Taxmann.com 185], upheld the addition of entire amount of share capital, o entire amount of share capital, on the ground that the shares were n the ground that the shares were issued at unjustifiable higher amount of premium and accordingly issued at unjustifiable higher amount of premium and accordingly issued at unjustifiable higher amount of premium and accordingly held that the entire transaction is not genuine. The SLP filed against held that the entire transaction is not genuine. The SLP filed against held that the entire transaction is not genuine. The SLP filed against this decision before the Supreme Court also stands dismissed. Since this decision before the Supreme Court also stands dismissed. Since this decision before the Supreme Court also stands dismissed. Since the appellant is b the appellant is based in the Bombay, therefore, the AO further held ased in the Bombay, therefore, the AO further held that this decision of Hon'ble Bombay High Court, in case of Major that this decision of Hon'ble Bombay High Court, in case of Major that this decision of Hon'ble Bombay High Court, in case of Major Metals Ltd. Vs. Union of India [207 Taxmann.com 185] is binding on Metals Ltd. Vs. Union of India [207 Taxmann.com 185] is binding on Metals Ltd. Vs. Union of India [207 Taxmann.com 185] is binding on the assessing officer and to be followed in deciding such issues. the assessing officer and to be followed in deciding such issues. the assessing officer and to be followed in deciding such issues. 7.5 Keeping in mind the facts stated here in above, in my eping in mind the facts stated here in above, in my eping in mind the facts stated here in above, in my considered opinion the entire amount of share application considered opinion the entire amount of share application considered opinion the entire amount of share application money/share money/share money/share premium/share premium/share premium/share capital capital capital of of of Rs.14,99,57,141/-, Rs.14,99,57,141/ Rs.14,99,57,141/ received from M/s Matrix Partners India investment Holdings II LLC, received from M/s Matrix Partners India investment Holdings II LLC, received from M/s Matrix Partners India investment Holdings II LLC, having its registered having its registered office in Mauritius, is dubious in nature and office in Mauritius, is dubious in nature and design to introduce its own unaccounted money under the garb of design to introduce its own unaccounted money under the garb of design to introduce its own unaccounted money under the garb of share premium, in its books of account, from the tax heaven share premium, in its books of account, from the tax heaven share premium, in its books of account, from the tax heaven country- which can't be subjected to any verification/cross which can't be subjected to any verification/cross which can't be subjected to any verification/cross check, therefore, not tena therefore, not tenable and addition made by the AO is liable to be ble and addition made by the AO is liable to be upheld. All the grounds of appeal, are decided upheld. All the grounds of appeal, are decided accordingly. accordingly.” 5.3 Before us, the Ld. counsel for the assessee filed an application Before us, the Ld. counsel for the assessee filed an application Before us, the Ld. counsel for the assessee filed an application under Rule 29 of the Income under Rule 29 of the Income-tax Appellate Tribunal Rules, 1963 for tax Appellate Tribunal Rules, 1963 for admitting additional evidence as under: additional evidence as under:
ADDITIONAL EVIDENCE PAPERBOOK INDEX Particulars S. No. Page No. Particulars Page No. Audited Financial Statements of the Appellant I. Audited Financial Statements of the Appellant Audited Financial Statements for FY 2012-13 1-32 1. Audited Financial Statements for FY 2012 1 Audited Financial Statements for FY 2013-14 33-62 2. Audited Financial Statements for FY 2013 33 Audited Financial Statements for FY 2014-15 63-83 3. 3- Audited Financial Statements for FY 2014 63 Audited Financial Statements for FY 2015-16 84- 123 4. 4' Audited Financial Statements for FY 2015 84 124- 128 5. Valuation report dated 28th September 2012 issued by Valuation report dated 28 124 the independent valuer the independent valuer II. Overview of DeltaZen4 7 A dvisors LLP (formerly “Matrix Overview of DeltaZen4 7 A dvisors LLP (formerly “Matrix Partners Partners ”) 6. 129-141 Information about firm background, team members Information about firm background, team members 129 and investment focus and investment focus 7. 142- 143 AIF related regulatory details of the firm as mentioned AIF related regulatory details of the firm as mentioned 142 on the Firm’s website on the Firm’s website 8. 144- 152 Media Coverage for Rebranding of “Matrix Partners” Media Coverage for Rebranding of “Matrix Partners” 144 as “Z47” (DeltaZen47 Advisors LLP) in India. as “Z47”
Registration of “Matrix Partners” with SEBI 153-154 Registration of “Matrix Partners” with SEBI 153 Ill Portfolio collection of“Z47”
Finn Portfolio and Spotlight Investments Finn Portfolio and Spotlight Investments 155-177 155 IV.Media Coverage of Z47’s Investment in Shot Formats IV.Media Coverage of Z47’s Investment in Shot Formats IV.Media Coverage of Z47’s Investment in Shot Formats 11. 178 178 “Matrix provides Series A for Shot Formats Digital “Matrix provides Series A for Shot Formats Digital Works” on Works” on www.avej.com 12. 179- 182 179 “Digital Entertainment Platform Biscoot Receives “Digital Entertainment Platform Biscoot Receives Series A Funding from Matrix Partners” on Series A Funding from Matrix Partners” on www.vccircle.com www.vccircle.com 5.4 The evidence placed comprises, inter alia, audited financial The evidence placed comprises, inter alia, audited financial The evidence placed comprises, inter alia, audited financial statements for subsequent years as well as the valuation report statements for subsequent years as well as the valuation report statements for subsequent years as well as the valuation report dated 28.09.2012, which were stated to be germane to the dated 28.09.2012, which were stated to be germane to the dated 28.09.2012, which were stated to be germane to the justification of the premium and to the DCF projections forming the justification of the premium and to the DCF projections forming the justification of the premium and to the DCF projections forming the substratum of valuation. During the course of hearing, the learned atum of valuation. During the course of hearing, the learned atum of valuation. During the course of hearing, the learned counsel pressed for admission of additional evidence only with counsel pressed for admission of additional evidence only with counsel pressed for admission of additional evidence only with respect to items 1 to 5 of the Paper Book, submitting that the actual respect to items 1 to 5 of the Paper Book, submitting that the actual respect to items 1 to 5 of the Paper Book, submitting that the actual financial performance in subsequent years exceeded the projected financial performance in subsequent years exceeded the project financial performance in subsequent years exceeded the project revenue, and therefore the valuation at the relevant time was revenue, and therefore the valuation at the relevant time was revenue, and therefore the valuation at the relevant time was neither fanciful nor excessive. neither fanciful nor excessive.
5.5 In our considered view, the additional evidence now sought to In our considered view, the additional evidence now sought to In our considered view, the additional evidence now sought to be introduced is material and bears directly upon the core issue— be introduced is material and bears directly upon the core issue be introduced is material and bears directly upon the core issue namely, the justification of namely, the justification of the valuation underlying the impugned the valuation underlying the impugned share premium. The evidence was not considered by the lower share premium. The evidence was not considered by the lower share premium. The evidence was not considered by the lower authorities and, in our view, is essential for a fair and complete authorities and, in our view, is essential for a fair and complete authorities and, in our view, is essential for a fair and complete adjudication of the controversy. The principles governing admission adjudication of the controversy. The principles governing admission adjudication of the controversy. The principles governing admission of additional evidence of additional evidence are well settled: where such evidence is are well settled: where such evidence is crucial to do substantial justice and could not earlier be produced crucial to do substantial justice and could not earlier be produced crucial to do substantial justice and could not earlier be produced for bona fide reasons, the Tribunal would be justified in admitting for bona fide reasons, the Tribunal would be justified in admitting for bona fide reasons, the Tribunal would be justified in admitting the same.
5.6 Accordingly, in the interests of justice and to ensure a Accordingly, in the interests of justice and to ensure a Accordingly, in the interests of justice and to ensure a complete and proper examination of the matter, we set aside the e and proper examination of the matter, we set aside the e and proper examination of the matter, we set aside the orders of the lower authorities and restore the entire issue to the file orders of the lower authorities and restore the entire issue to the file orders of the lower authorities and restore the entire issue to the file of the Assessing Officer. The Assessing Officer shall examine the of the Assessing Officer. The Assessing Officer shall examine the of the Assessing Officer. The Assessing Officer shall examine the additional evidence submitted, undertake such inquiries as he may additional evidence submitted, undertake such inquiries as h additional evidence submitted, undertake such inquiries as h consider necessary, and thereafter adjudicate the issue afresh in consider necessary, and thereafter adjudicate the issue afresh in consider necessary, and thereafter adjudicate the issue afresh in accordance with law. The assessee shall be afforded adequate accordance with law. The assessee shall be afforded adequate accordance with law. The assessee shall be afforded adequate opportunity to present its case, and any material proposed to be opportunity to present its case, and any material proposed to be opportunity to present its case, and any material proposed to be used against it shall be duly confronted to ensure compliance with used against it shall be duly confronted to ensure complia used against it shall be duly confronted to ensure complia principles of natural justice. In consequence, the grounds raised by principles of natural justice. In consequence, the grounds raised by principles of natural justice. In consequence, the grounds raised by the assessee are allowed the assessee are allowed for statistical purposes.
6. In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on ounced in the open Court on 25/ /11/2025.