Case Law Details
Annu Agrotech Private Limited Vs PCIT (ITAT Jaipur)
Large share premium: CIT cannot initiate proceedings under section 263 to start fishing & roving enquiries
The Ld. Pr.CIT also alleged that the AO did not make enquiries and verification on the issue of large share premium received by the assesse and the applicability of S.56(2)(viib) and other relevant sections even though this was not the reason for scrutiny selection.
Alternatively and without prejudice to above, even otherwise on merits, there has been due and proper application of mind inasmuch as the AO raised directly relevant queries which were duly replied by the assesse as well. The assesse also submitted the computation as to how the assesse derived the amount of the premium which was also admitted by the Ld. CIT in para 3 pg 4 of the Impugned Order. In addition, thereto, the assesse also submitted a report of the expert dated 10.10.2015 under Rule 11UA which are at page Nos. 46-58 of the paper book which fully justified charging premium @ Rs 50 per share. Hence, the AO was fully justified in not applying in S. 56(2)(viib).
There appears no valid basis to compute excessive value of Rs 1.73 per share which is not supported by any expert report but mere suspicion. In other words, it was nothing but a substitution of opinion by the Ld. Pr.CIT. Therefore, on this aspect also the subjected assessment order could not be covered u/s 263 as it was neither erroneous nor prejudicial to the interest of the revenue. He also got valuation done u/r 11UA by expert which is binding upon AO, as held in Rameshwaram Strong Glass Pvt Ltd vs. AO 195 TTJ465 (Jp).
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