M/S SUGHANDHA NIRMAN PVT. LTD.,KOLKATA vs. ITO, WD-6(1), KOLKATA, KOLKATA

The Assessee is a company engaged in the business of share trading and deriving commission. For A.Y.2008-09 the aassessee filed its return of income on 30.09.2008 declaring total income of Rs.640/-. The return was processed u/s 143(1) of the Act on 09.12.2009. Thereafter notice u/s 148 of the Act dated 01.04.2010 was issued and served on the assessee. In the course of assessment proceedings u/s 147 of the Act the AO noticed that the assessee has raised paid up share capital of Rs.4.91 crores including share premium of Rs.4.655 crores. The AO has observed in the order of assessment u/s.147 of the Act that the same has been verified on test check basis and that the ld. AR had filed Balance sheet, Profit and loss account and other necessary details and produced bank statement and books of accounts and explained the return. Thereafter a sum of Rs.30 ,000/- was disallowed on the expenses debited in the profit and loss account. Assessment was completed by making an addition of Rs.30,000/- and also the AO disallowed preliminary expenses of Rs.31,500/-. The AO passed order of assessment u/s 147 r.w.s. 143(3) of the Act on 30.04.2010. M/s. Sugandha Nirman Pvt.Ltd. A.Y.2008-09

In exercise of his powers u/s 263 of the Income Tax Act, 1961 (Act), the CIT, Kol-II, Kolkata passed order dated 30.03.2013 holding that the aforesaid order of the AO was erroneous and prejudicial to the interest of the revenue in so far the AO did not make proper and adequate enquiry with regard to the receipt of share capital and share premium during the previous year by the assessee.

The Assessee preferred appeal against the order dated 30.3.2013 of the CIT passed u/s.263 of the Act before the Income Tax Appellate Tribunal(ITAT). The ITAT Kolkata “C” Bench in by order dated 5.4.2017 was pleased to set aside the impugned order and remand the same to CIT with the direction to consider the issues that arise for consideration pursuant to the show cause notice issued u/s 263 of the Act afresh after affording the assessee opportunity of being heard.

The present appeal arises out of the order of assessment order passed pursuant to the order u/s.263 of the Act dated 30.3.2013. Since the Assessment proceedings out of which the present appeal arises is based on the order u/s.263 of the Act of the CIT, Kol-II, Kolkata passed order dated 30.03.2013 which has been set aside by the Tribunal, We are of the view that the assessment proceedings pursuant to order u/s.263 of the Act has no basis and the same is hereby annulled. 6. In the result, the appeal of the Assessee is allowed and it is held that the assessment proceedings pursuant to order u/s.263 of the Act has no basis and the same is hereby annulled. Order pronounced in the open Court on 01.01.2018.