UBERALL SOLUTIONS (I) LIMITED,PUNE vs. INCOME-TAX OFFICER, WARD - 12(5), PUNE

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ITA 386/PUN/2018Status: DisposedITAT Pune26 May 2022AY 2013-143 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted additional evidence submitted by the assessee, which was considered crucial for the matter. The case was restored to the Assessing Officer for fresh adjudication based on this new evidence.

What were the facts?

The assessee challenged an addition of Rs. 54,90,000 made under Section 56(2)(viib) of the Income Tax Act, 1961, concerning the valuation of shares. The lower authorities rejected the assessee's valuation report due to alleged mistakes and confirmed the addition.

What were the issues?

The primary issue was the correctness of the share valuation and the subsequent addition made by the revenue authorities. The admissibility of additional evidence for re-examination was also a key consideration.

Which sections of the Income-tax Act were involved?

Section 56(2)(viib),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI S. S. GODARA

For Appellant: Smt. Deepa Khare
For Respondent: Shri Arvind Desai
Hearing: 24.05.2022Pronounced: 26.05.2022

ORDER

PER S. S. GODARA, JM:

1.

This assessee’s appeal for assessment year 2013-14 arises against the CIT(A)-5 Pune’s order dated 17.11.2017 passed in case no.PN/CIT(A)-5/ITO.Wd-12(5)/418/2015-16 involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short the Act. Heard both the parties. Case file perused.

2.

The assessee’s sole substantive grievance raised in the instant appeal challenges correctness of both the lower authorities’ action making section 56(2)(viib) addition of Rs.54,90,000/- in the course of assessment dated 07.03.2016 as upheld in the CIT(A)’ order as follows :-

“3.6 I have perused carefully the material on record and the contention of the Appellant. I find that, the valuation report of the Appellant shows certain mistakes due to which the same cannot be accepted and has been rightly rejected by the Assessing Officer, who has also pointed out these mistakes. In the cash flow working, tax cost is added back to the Profit Before Tax (PBT) to arrive at Profit After Tax. The calculation of cash flow for the years 2013 and 2016 is wrong. It is also not clear, how changes in the working capital is derived. The Assessing Officer has correctly pointed out that the CA has not accepted any responsibility for accuracy and completeness of the information provided to him, nor was any audit, review or examination of any of the historical or prospective information used, performed. Nor was any opinion expressed with regard to the same. The CA has simply calculated on basis of the information provided by the Assessee without verifying or checking by independent enquiry the information supplied. The turnover has also been estimated at 123.40% increased for the year 31.03.2014. In view of this, the action of the Assessing Officer in rejecting the valuation report of the Appellant is upheld. The valuation taken by the Assessing Officer of the fair market value of Rs.67 per share is also upheld and the addition on this account of Rs.54,90,000/- u/s. 56(2)(viib) of the I. T. Act 1961 is confirmed. The Appellant fails in this Ground of Appeal which is dismissed.”

3. I have given my thoughtful consideration to rival pleadings. A perusal of the case files suggests that the assessee has moved a petition seeking admission of additional evidence running into 74 pages dated 04.11.2019 containing its information memorandum, product information, packaging, marketing, distribution, sales assumptions and projection, employees details with cost, other expenses, projects P&L account, balance sheet, market data along with sales and expenses projection with explanation supporting its method of valuation submitted before the Assessing Officer. The Revenue could hardly dispute that all this additional evidence goes to root of the matter which requires factual verification. I therefore exercise this tribunal’s jurisdiction under Rule 28 of the Appellate

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