BRAND BAZOOKA ADVERTISING PVT. LTD.,GURUGRAM vs. ITO, WARD- 1(3), GURGAON

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ITA 6860/DEL/2019Status: DisposedITAT Delhi14 December 2023AY 2016-17Bench: SHRI G.S. PANNU, HON’BLE (Vice President), SHRI ANUBHAV SHARMA (Judicial Member)5 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee did not receive proper notice from the CIT(A) due to address changes, leading to an ex-parte order. Therefore, the case was remanded to the CIT(A) to provide the assessee an opportunity to contest the issues on merits.

What were the facts?

The assessee company issued shares at a premium, which the Assessing Officer (AO) deemed incorrect based on a valuation report. The AO added the difference to the assessee's income under Section 56(2)(viib). Additionally, a discrepancy in gross receipts was noted and added to the income.

What were the issues?

Whether the assessee was provided with adequate opportunity of hearing by the CIT(A) and if the valuation of shares issued at a premium was correctly assessed.

Which sections of the Income-tax Act were involved?

Section 56(2)(viib),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : A : NEW DELHI

Before: SHRI G.S. PANNU, HON’BLE & SHRI ANUBHAV SHARMA

For Appellant: Shri D.C. Garg, CA
For Respondent: Shri R.K. Meena, Sr. DR
Hearing: 06.12.2023Pronounced: 14.12.2023

BEFORE SHRI G.S. PANNU, HON’BLE VICE PRESIDENT AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER Assessment Year: 2016-17 Brand Bazooka Advertising Pvt. Ltd., Vs ITO, Flat No.V-33/7, 4th Floor, Ward-1(3), DLF City-3, Gurgaon, Gurgaon. PAN: AAFCB6318L (Appellant) (Respondent) Assessee by : Shri D.C. Garg, CA Revenue by : Shri R.K. Meena, Sr. DR Date of Hearing : 06.12.2023 Date of Pronouncement : 14.12.2023 ORDER PER ANUBHAV SHARMA, JM:

This is appeal preferred by the Assessee against the order dated 20.06.2019 of the Commissioner of Income Tax (Appeals)-1, Gurgaon, (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in appeal No.530/18-19 arising out of the appeal before it against the order dated 13.12.2018 passed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ITO, Ward 1(3), Gurgaon (hereinafter referred to as the Ld. AO).

2.

Brief facts are that return declaring loss of Rs.26,32,741/- was filed on 16/10/2016 by the assessee. During the course of assessment proceedings, the Assessing Officer noted that the appellant had issued 30000 shares of face value of Rs.10/- at a premium of Rs. 140/- per share. The details of these shares issued by the appellant are tabulated in the assessment order as under:-

S.No. Name of the Residential No. of shares Face value Share Total shareholder status issued per premium share share per share premium (Rs.) (Rs.) (Rs.) Resident 140 39,20,000 Vivek Aggarwal 1. 28,000 10 2. Anand Jain Resident 1,000 10 140 1,40,000 3. Kamal Aggarwal Resident 140 1,40,000 1,000 10 Total 30,000 42,00,000

3.

The appellant submitted that the shares were issued at a premium on the basis of valuation report of the valuer. The Assessing Officer examined the various issues pertaining to valuation of report and pointed out number of discrepancies and deficiencies. The Assessing Officer held that the valuation done by the valuer was not correct and accordingly rejected the DCF method of valuation adopted by the appellant. The Assessing Officer valued the shares by adopting the NAV method as per which the valuation of each share worked out to Rs. 29.05/-. The difference of Rs.36,28,500/- received as share premium by the appellant was added to the total income of the appellant u/s 56(2)(viib) of the Act.

4.

The Assessing Officer further noted that the appellant had shown gross receipts of Rs.63,84,654/- whereas as per the Form-26AS, the total receipts worked out to Rs.70,62,863/-. The appellant could not satisfactorily explain the difference of Rs.6,78,209/-. The Assessing Officer accordingly added this amount to the total income of the appellant.

5.

Notice for hearing of appeal by Ld. CIT(A) was issued upon the assessee on 20/05/2019 and thereafter notices were again issued and the case was fixed for hearing on 30/05/2019. On 30/05/2019 the case was fixed for hearing on 12/06/2019. On 12/06/2019 none attended. Further, another notice was issued on 12/06/2019 through email and the case was fixed for hearing on 19/06/2019. None attended. In the absence of any reply from the appellant the Ld.CIT(A) proceeded ex-parte.

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