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Facts
The Revenue appealed an order from the CIT(A) concerning assessment year 2014-15. The Assessing Officer had made an addition under Section 68 for unexplained cash credit related to share premium, alleging the assessee failed to explain the amount and provide a valuation report.
Held
The Tribunal held that the Assessing Officer's action of treating the share premium addition under Section 68 was unsustainable, especially when a specific provision under Section 56(2)(vii)(c) existed. It was also noted that the assessee had submitted a valuation report, and the department cannot make a new case in appellate proceedings.
Key Issues
Whether the addition for share premium under Section 68 was justified when Section 56(2)(vii)(c) was applicable and a valuation report was provided.
Sections Cited
68, 143(3), 56(2)(vii)(c), 254(1)
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Income Tax Appellate Tribunal, “DB” BENCH, AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI MANOJ KUMAR AGGARWAL
Date of Hearing 12.02.2025 Date of Pronouncement 12.02.2025 ORDER
PER SATBEER SINGH GODARA, JUDICIAL MEMBER:
This Revenue’s appeal for assessment year 2014-15 arises against Commissioner of Income Tax (Appeals)-4, [in short, the “CIT(A)”] Kanpur’s order dated 16.10.2023, passed in case No. CIT(A)- IV/KNP/11182, in proceedings under Section 143(3) of the Income Tax Act, 1961, [hereinafter referred to as ‘the Act’].
Heard both parties at length. Case file perused.
It emerges during the course of hearing that the learned Assessing Officer has framed his assessment on 29.11.2016 making section 68 unexplained cash credit additions of Rs.4,98,58,200/- alleging the assessee to have failed to explain huge share premium followed by non- filing of the concerned valuation report under the prescribed method(s).
It is in this factual backdrop that we invited learned CIT-DR’s attention to the fact that once there already exists a specific provision u/s 56(2)(vii)(c) of the Act for making such an addition of share premium, learned Assessing Officer’s action to treat the same as unexplained u/s 68 is hardly sustainable in law.
Faced with the situation, learned CIT-DR vehemently argues that the Assessing Officer had in fact wrongly mentioned the relevant provision u/s 68 since it was clear cut instance of addition to be made u/s 56(2) in the foregoing terms.
We find no merit in the Revenue’s foregoing vehement contentions in light of Mahindra & Mahindra Vs. DCIT (200() 30 SOT 379 (Mum.) (SB that it is not open for the department to make out a new case in second appellate proceeding u/s254(1) of the Act. This is indeed coupled with the fact that the assessee had duly filed his valuation report before the Assessing Officer on 15.11.2016 which has been seriously disputed at the Revenue’s behest. Be that as it may, we are of the considered view that once the assessee had justified it’s alleged huge share premium, no addition could have been made u/s 68 of the Act is forming subject matter of adjudication before us. The Revenue’s instant sole substantive ground is rejected therefore.
This Revenue’s appeal is dismissed. Order pronounced in the open court on 12.02.2025