MOUNT SPRING BEVERAGES PRIVATE LIMITED,NEW DELHI vs. ITO,WARD-17(2), DELHI

At the time of hearing, it was found that the assessee has raised a ground No.2 alleging that the ld.CIT(A) has erred in rejecting the assessee’s additional evidences. On going through the impugned order, it comes up that the appellant is a company engaged in the business of manufacturing, bottling & packaging of natural mineral water at its factory situated at Paonta Sahib, Himachal Pradesh. Assessee filed its return of income at loss of Rs 27,73,570/- on 30.09.2013. The appellant is a closely held company that issued fresh shares during the AY 2013- 14. Assessee issued 150,000 equity shares of face value of Rs 10/- per share issued at @ 200/- per share, amounting to Rs 3 crores, to enhance its working capital. The new shares were issued to the new independent investors as well as to old investors, who after appraisal of the projects and its prospects mutually negotiated the price, after independent Valuation of the Shares using DCF method, certified by a Chartered Accountant. The book value of the shares as per audited accounts as on 31.3.2012 was Rs 0 due to accumulated losses in the Company. Another formal valuation report was acquired by the new investors, before making the decision to invest, to assess the value of the company, which was kept & not shared by the old management and thus assessee was prevented from submitting the same during the course of assessment, and the same valuation report was made available during the Remand proceedings and was submitted before the Ld AO. 3

The Ld AO issued a demand for Rs 106 lacs for deemed Income of Rs.285 lacs under Sec 56(2)(viib) and Rs 7.5 lacs under Sec 68 and the Ld. AO did not accept the impact of imbedded intrinsic value of the Company on the DCF valuation method. The order was appealed against and the Ld CIT(A) whilst granting relief for additions made u/s Sec 68, upheld the additions under Sec 56(2)(viib), citing that additional information could not be accepted, and aggrieved with the order of the learned CIT (A) the present appeal is preferred. We find that arbitrarily, the same set of additional evidences have been accepted with regard to giving one relief to the assessee and rejected for denying the other relief. Thus, in regard to the relief denied for which the assessee has raised grounds on merits, vide ground No.1, we admit the additional evidences of the assessee and direct the ld.CIT(A) to take into consideration the additional evidences and pass an order afresh. Needless to say, an opportunity of hearing shall be given afresh to the assessee. The appeal of the assessee is allowed for statistical purposes.