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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI
Before: SHRI G.D. AGRAWAL, HON’BLE & SHRI SUDHANSHU SRIVASTAVA
This appeal has been preferred by the assessee against the order dated 1.3.2017 passed by the ld. CIT(A)-36, New Delhi and pertains to assessment year 2013-14 wherein the ld. CIT(A) has dismissed the assessee’s appeal contesting the addition made u/s 68 of the Income Tax Act, 1961.
Following grounds have been raised in the appeal:-
I.T.A. 1937/Del/2017 Assessment year 2013-14
“1. On the facts and circumstances of the case, the order passed by the learned CIT(A) is bad both in the eye of law and on facts.
2. On the facts and circumstances of the case, the CIT(A) has erred both on facts and in law in passing the order without giving assessee proper and adequate opportunity to represent his case in violation of principle of natural justice.
On the facts and circumstances of the case, the learned CIT(A) has erred both in facts and law in passing the order without giving any finding on the merits of the case.
4 (i) On the facts and circumstances of the case, the learned CIT(A) has erred both in facts and law in confirming the addition of Rs.7,92,00,000/- under section 56(2)(vii)(b) of the Act made by the AO being the share premium received by the assessee in respect of the share capital issued during the year.
(ii) That the above said addition was made by the learned A.O. ignoring the fact that the Fair Marketing Value (FMV) of the share issued is not less than the share value of the company as on the date when these share were issued.
5. On the facts and circumstances of the case, the CIT(A) has confirmed the addition ignoring the fact that the Assessee owns a premium property in Vasant Kunj measuring 430 sq. mtrs. and having the built-up area of more than 12880 sq.ft., which was acquired long time back in the year 2002-03 at the cost of Rs.7.28 crores.
On the facts and circumstances of the case, the addition was made ignoring the fact that the new shareholders to whom the Assessee issued shares at the premium of Rs.330/- have become owner of 96% of the total capital of the Company and as such it cannot be said that the consideration for issue of the share is excessive so as to invoke the provision of Section 56(2)(vii)(b).
On the facts and circumstances of the case, the learned I.T.A. 1937/Del/2017 Assessment year 2013-14
CIT(A) has erred both in facts and law in confirming the disallowance of Rs.2,63,295/- on account of the expenses incurred on account of the Stamp Duty paid during the year under consideration.
On the facts and circumstances of the case, the CIT(A) has erred both in facts in confirming the disallowance of Rs.60,727/- being the expenses incurred on account of the insurance premium.
That the appellant craves leave to add, amend or alter any of the grounds of appeal.”
3. At the outset, ld. AR submitted that the assessee’s appeal had been dismissed ex parte qua the assessee. Our attention was drawn to para 4, 5, 6 and 7 of the CIT(A)’s order wherein the ld. CIT(A) has observed that as the assessee was not interested in pursuing the appeal, there was no point in keeping the appeal pending indefinitely. It was submitted that the ld. CIT(A) proceeded to adjudicate based on the material available on record. Ld. AR further submitted that the assessee had duly filed detailed submissions before the ld. CIT(A) on 10th February, 2017 and a copy of the same was placed on record before us in support of the contention. It was also submitted that the ld. CIT(A) had passed the impugned order on 1st March, 2017 but had not considered submissions/evidences filed by the assessee on 10.2.2017 and therefore, the principle of natural justice had been I.T.A. 1937/Del/2017 Assessment year 2013-14 violated while dismissing the assessee’s appeal. Learned Departmental Representative, on the other hand, supported the order of the ld. CIT(A) and of the Assessing Officer and submitted that these additions had been made after following the proper procedure and the fault was entirely of the assessee in not submitting the required documents.
We have heard the rival submissions and carefully perused the relevant material placed on record. A perusal of the impugned order shows that the ld. CIT(A) has confirmed the findings of the Assessing Officer by simply relying on the observations made in the assessment order but has not considered the assessee’s submissions on merits. Thus, the order of the ld. CIT(A) is erroneous in so far as the assessee’s submissions have not been duly considered. On an overall consideration of the facts surrounding the case, it is our considered opinion that interest of justice would be served if the issue is restored to the file of the Assessing Officer for examining and adjudicating the issues afresh. Accordingly, we set aside the order of the ld. CIT(A) and restore the issue to the file of the ld. Assessing Officer for re-examination of the facts and making the assessment afresh after giving due opportunity to the assessee to I.T.A. 1937/Del/2017 Assessment year 2013-14 present its case.
In the result, the assessee’s appeal stands allowed for statistical purposes.
The order is pronounced in the open court on 20th September, 2017.