DCIT 4(2)(2), MUMBAI vs. MERCHANT AGRI INDIA P. LTD NOW MERCHANT AGRI GLOBAL P. LTD, MUMBAI

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ITA 2646/MUM/2017Status: DisposedITAT Mumbai26 December 2019AY 2009-105 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the CIT(A)'s finding that the amount could not be taxed in the current year remained uncontroverted, the AO's grievance about quoting the wrong section became academic. The cross-objection filed by the assessee was also dismissed as the assessee did not wish to pursue it if the AO's appeal was dismissed.

What were the facts?

The Assessing Officer (AO) made an addition of Rs. 4,50,00,000/- under Section 28(iv) during a reopened assessment. The CIT(A) deleted this addition, finding that the transaction did not pertain to the relevant financial year and its genuineness could not be examined.

What were the issues?

Whether the AO's addition was valid when the CIT(A) found the transaction did not pertain to the relevant year, and whether the AO's grievance was rendered academic due to the CIT(A)'s uncontroverted findings.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 28(iv),Section 68,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI‘D’ BENCH, MUMBAI

Heard together (2 matters)

ITA No. 2646/Mum/2017
C.O No. 245/Mum/2018

Read from the judgment's own cause title. This page is filed under one of them.

ORDER Per Pramod Kumar, VP:

1.

By way of this appeal, the assessee appellant has challenged correction of learned CIT(A)’s order dated 09.12.2016, in the matter of assessment under section 143(3) r.w.s. 147 of the Income Tax Act 1961 for the assessment year 2009-10.

2.

Grievances raised by the appellant Assessing Officer are as follows:-

1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing relief to the assessee on account of share premium received merely because the AO has quoted the wrong section for addition and also established the non genuineness of the transactions and non-creditworthiness of the parties." 2. "On the facts and in the circumstances of the case and in law, the Ld. C1T(A) has erred by not following the settled principle of law (State of Karnataka Vs Krishnaji Srinivas Kulkarni, 16th December 1993,1994 SSC(2) 558JT 1993 Supl., 35) at mere wrong quoting of section does not invalidate the additions."

3.

To adjudicate on these grievances, only a few material facts need to be taken note of. It is a case of reopened assessment during the course of assessment proceedings, the Assessing Officer brought to tax an amount of Rs. 4,50,00,000/- under section 28(iv) of the Income Tax Act 1961. When matter travelled in appeal before the CIT(A), learned CIT(A) deleted the said addition by observing, inter alia, as follows:-

C.O No. 245/Mum/2018 Assessment year: 2009-10 Page 3 of 5

5.1.11 The primary question being answered the addition u/s. 28(iv) has no legs to stand upon. However, in context of the secondary question, it is to be noted that the appellant had duly submitted details of companies to whom shares were allotted at a premium along with copies of Form 2, Return of Allotment filed with ROC and Company Master Details from website of Min. Of Corporate Affairs/ROC, which includes registration nos., addresses, dt. of incorporation etc. Looking at all the information available in the audited accounts of the appellant and filed before the ROC, the genuineness of the transaction cannot be doubted. In any case, the assessing officer was not examining the share premium amount u/s. 68 but u/s. 28(iv), therefore, the questions of genuineness does not arise. Moreover, as seen, the original receipt did not pertain to the instant financial year, therefore, its genuineness cannot be examined in the current year.

4.

The Assessing Officer is aggrieved of the relief so given by the CIT(A) only on the short ground that the Assessing Officer quoted the wrong section.

5.

We have heard the rival contentions, perused the material in record and duly considered facts of the case in the light of the applicable legal position.

6.

As a plain reading of the extracts from learned CIT(A)’s order, as reproduced above, would show, learned CIT(A) has not only held that no such additions could have been made under section 28(iv), but he has also held that the receipt in question “did not pertain to the relevant previous year,” and, for this reason, “it’s genuineness cannot be examined in the current year”. These finding and conclusions of the CIT(A) remain uncontroverted and have not been challenged by the appellant. In this view of the matter, the grievance of the appellant is rendered academic. In any case, learned CIT(A), has given findings about genuineness of the transactions as C.O No. 245/Mum/2018 Assessment year: 2009-10 Page 4 of 5 well, which also remain uncontroverted. Given the above backdrop, whether the section in which impugned addition is made was right or wrong is wholly immaterial if the amount cannot be taxed at all in this assessment year and that finding of the CIT(A), as noted earlier as well, has not been challenged before us. Grievance raised by the appellant is thus dismissed as infructuous.

7.

In the present, appeal is dismissed.

CO No. 245/Mum/2018

8.

By way of this cross objection, the assessee appellant has challenged correction of learned CIT(A)’s order dated 09.12.2016, in the matter of assessment under section 143(3) r.w.s. 147 of the Income Tax Act 1961 for the assessment year 2009-10.

9.

Grievances raised by the cross objection are as follows:-

1.(a) The learned Commissioner of Income tax (Appeals) failed to appreciate that notice issued under section 148 of the Act is without jurisdiction and contrary to the provisions of section 147 and section 148 of the Act. (b) The learned Commissioner of Income tax (Appeals) further erred in not appreciating that order made under section 143(3) rws 147 of the Act is bad in law and contrary to the provisions of the Act in as much as reasons recorded before issuing notice under section 148 of the Act has not been provided to the Respondent Company in spite of specific request was made by him.

2. The learned Commissioner of Income tax (Appeals) erred in not adjudicating Ground Number 3 and 4 and additional grounds of appeal filed vide letter dated 01st November, 2016.

C.O No. 245/Mum/2018 Assessment year: 2009-10 Page 5 of 5 10. When This C.O came up for hearing, learned counsel for the assessee fairly submitted that in the event of appeal of the Assessing Officer being dismissed, he would not wish to pursue the grievances raised in the cross objection. As we have dismissed the appeal filed by the Assessing Officer, therefore, the grievances raised in this appeal are not required to be deal with.

11.

In the result, cross objection is dismissed for want of prosecution. To sum up the appeal of the Revenue and CO filed by the assessee are dismissed in the terms indicated above. Pronounced in the open court today on the 26th day of December,2019

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