ITO WARD - 20(3), NEW DELHI vs. QUETZAL EXIM PVT LTD, NEW DELHI

The appeal filed by the Department of Revenue is against order dated 08.11.2019 of Learned Commissioner of Income Tax (Appeals)-7, Delhi (hereinafter referred to as “Ld. CIT(A)") under Section 250(6) of the Income Tax Act, 1961 (hereinafter referred to as "the Act”) arising out of assessment order dated 28.12.2018 of the Learned Assessing Officer/Income Tax Officer, Ward 20(3), New Delhi ((hereinafter referred to as "Ld. AO") under Section 143 (3) of the Act for AY 2016-17.

Brief facts of the case are that assessee company filed its return of income on 17.10.2016 declaring total income of Rs.90,780/-. The case was selected for under limited scrutiny through CASS for verification of investment and also for verification of funds received in the form of share premium are from disclosed sources and have correctly been offered for tax. Notice under Section 143(2) of the Act was issued electronically on 05.07.2017. Notice under Section 142(1) of the Act were issued. Assessee filed electronically responses to the notices. On completion of proceedings, Ld. AO vide order dated 28.12.2018, assessed income of Rs.14,26,38,780/- and made addition of Rs.14,25,48,000/- under Section 56(viib) of the Act.

Against order dated 28.12.2018 of Ld. AO, the assessee filed appeal before Ld. CIT(A) which was allowed vide order dated 08.11.2019.

Being aggrieved, the Appellant/Department of Revenue, preferred present appeal with following grounds: “1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition u/s 56(2) of the Income Tax Act, 1961 of Rs.14,25,48,000/- on account of share allotment in excess of fair market value as determined under Rule 11UA(2) of the Income Tax Rules, 1962.”