The Tax Publishers2021 TaxPub(DT) 4791 (Kol-Trib)

INCOME TAX ACT, 1961

Section 263

AO had issued notice under section 142(1) and called for all details of share subscribers/share premium and pursuant to the notice, assessee filed all the documents to substantiate identity, creditworthiness and genuineness. The source of the source of share subscription was also brought to the notice of AO. Assessee was a private limited company and it was closely-held company and raised share subscription from its own directors and their wives who were all Income Tax assessees and all the moneys had come through banking channel and their creditworthiness was also proved by the documents produced before AO. Therefore, assessment order could not be treated as erroneous and prejudicial to the interest of Revenue.

Revision under section 263 - Erroneous and prejudicial order - No lack of enquiry on AO's part -

Pr. CIT treated order passed by AO as erroneous and prejudicial to the interest of Revenue on the ground that AO had failed to conduct enquiries under section 133(6) regarding source of investment of huge share capital by directors and their wives. Held: AO had issued notice under section 142(1) and called for all details of share subscribers/share premium and pursuant to the notice, assessee filed all the documents to substantiate identity, creditworthiness and genuineness. The source of the source of share subscription was also brought to the notice of AO. Assessee was a private limited company and it was closely held company and raised share subscription from its own directors and their wives who were all Income Tax assessees and all the moneys had come through banking channel and their creditworthiness was also proved by the documents produced before AO. Therefore, assessment order could not be treated as erroneous and prejudicial to the interest of Revenue

Relied:Malabar Industries Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2016-17



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