Case Law Details
Eduwizards Info solutions P. Ltd. Vs ACIT (ITAT Delhi)
ITAT Delhi held that confirmation of addition under section 56(2)(viib) of the income Tax Act read with Rule 11UA(2) of the Income Tax Rules without verification of the valuation report of the Chartered Accountant is unsustainable in law.
Facts- The case of the assessee was selected for scrutiny, an assessment order came to be passed on 25/12/2018 by making an addition of Rs. 5,56,24,843/- on the ground that the credits of Rs. 6,00,00,942/- are directly hit by Section 56(2)(viib) of the Act, the assessee has failed to discharge its onus on genuineness of transaction. Therefore, an amount of Rs. 5, 56,24,843/- was added to the income of the assessee.
The assessee has preferred an appeal before the Ld.CIT (A). The Ld.CIT(A) vide order dated 23/10/2019 dismissed the appeal filed by the assessee. Aggrieved by the order passed by the CIT(A), the assessee has preferred the present appeal.
Conclusion- In the present case, the Ld. A.O. and the CIT(A) have rejected the valuation report in threshold without verifying the same. As per the Assessee, the Valuation report is be inconformity with the provisions of Section 56(2)(viib) read with Rule 11UA (2) of the Income Tax Rules. In our opinion, in view of the facts and the circumstances of the case, the Lower Authorities ought to have considered the valuation report of the Chartered Accountant submitted by the assessee and should have verified as to whether the said valuation report is inconformity with Section 56(2) (viib) of the Act read with Rule 11UA (2) of the Income Tax Rules or not and accordingly should have decided the matter by following the principal of consistency.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
