OZONE OVERSEAS P.LTD,NEW DELHI vs. PRCIT-7, NEW DELHI

ITA 1535/DEL/2023Status: DisposedITAT Delhi23 February 2024AY 2018-19Bench: SHRI M. BALAGANESH (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)18 pages
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What did the Tribunal hold?

The Tribunal held that the Assessing Officer (AO) had conducted due diligence and adopted a plausible view by accepting the assessee's valuation method. The PCIT's order was deemed erroneous as it was based on a different opinion without establishing the AO's view as unsustainable.

What were the facts?

The assessee purchased shares at a certain price, and the PCIT initiated revision proceedings under Section 263, alleging the assessment order was erroneous and prejudicial to revenue. The PCIT believed the difference between the fair market value (FMV) and the purchase price should be taxed as income from other sources.

What were the issues?

Whether the PCIT validly invoked Section 263 when the AO had conducted inquiries and adopted a plausible view. Whether the difference between FMV and purchase price of shares should be taxed as income from other sources when the AO had accepted the assessee's valuation.

Which sections of the Income-tax Act were involved?

Section 263,Section 56(2)(x)(c)(B)

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Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI

Hearing: 21/12/2023Pronounced: 23/02/2024

PER YOGESH KUMAR U.S., JM: This appeal filed by the Assessee against the order of Learned

Principal Commissioner of Income Tax, New Delhi-7, [“Ld. PCIT”, for short], dated 31/03/2023 for Assessment Year 2018-19. The following grounds of appeal taken by the assessee:

“1. That order dated 31.03.2023 u/s 263 of the Act by the learned Pr. Commissioner of Income Tax, Delhi-7, New Delhi has been made without satisfying the statutory preconditions contained M/s Ozone Overseas (P) Ltd. vs. PCIT

in the Act and is therefore without juri iction and thus, deserves to be quashed as such.

2.

That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the facts

The order continues below.

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