Income Tax Appellate Tribunal - Mumbai
M/S Unihealth Consultancy ... vs Dcit, 8 (3) (1), Mumbai on 29 January, 2025
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "F" MUMBAI
BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER)
AND
SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER)
ITA No. 4387/MUM/2024
Assessment Year: 2017-18
M/s Unihealth Consultancy Ltd., The Dy. CIT-8(3)(1),
H-13 & H-14 Everest, 9th floor, Room No. 615, 6th floor, Aayakar
Tardeo Road, Vs. Bhavan, Maharishi Karve Road,
Mumbai-400034. Mumbai-400020.
PAN NO. AABCU 1551 C
Appellant Respondent
Assessee by : Mr. Rajesh Kalyani/ Ajay Dhoot
Revenue by : Ms. Rajeshwari Menon, Sr. DR
Date of He aring : 27/11/2024
Date of pronouncement : 29/01/2025
ORDER
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 09.07.2024 passed by the Ld. Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, Delhi [in short 'the Ld. CIT(A)'] for assessment year 2017-18, raising following grounds:
1. Section 68 of the Income Tax Act, 1961 M/s Unihealth Consultancy Ltd. 2 ITA No. 4387/MUM/2024
a) On the fact and in the circumstances of the case and in law, the learned Assessing Officer ("AO") erred in passing the order u/s. 143(3) of the Income Tax Act, 1961 ("ITA"), and the confirmation of the addition of 4,20,00,000/-
4,20,00,000/ u/s. 68 of the ITA by the learned Commissioner of Income Tax (Appeals) ("CIT(A)") is erroneous us and is liable to be quashed.
b) On the fact and in the circumstances of the case and in law, the learned AO failed to appreciate that the appellant had provided complete details regarding the identity, creditworthiness, and genuineness of the shareholder shareholde from whom the amounts were received. Copies of the relevant documents, including the profile, identity proof, Income Tax return and bank statements etc. were duly submitted and should have been taken into consideration.
c) On the fact and in the circumstances of the case and in law, circumstances the learned AO and learned CIT(A) did not properly consider the documentary evidence and explanations provided by the appellant concerning the cash credits. The failure to acknowledge the details and documents provided, which clearly show that the credits were genuine and properly explained, is a clear case of error in judgment.
d) On the fact and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the AO's addition without giving due regard to the the appellant's submissions and the evidence provided during the appellate proceedings. The learned CIT(A) should have considered the documents and explanations provided at the time of the appeal.
e) On the fact and in the circumstances of the case and in law, la the learned AO and learned CIT(A) have ignored the settled legal position regarding the burden of proof under Section 68 of the Act, which is only to establish the identity and creditworthiness of the shareholders and the genuineness of the transactions transactions, all of which were duly demonstrated by the appellant during the course of proceedings WITHOUT PREJUDICE
2. Section 56(2)(viib) of the Income Tax Act, 1961
a) On the fact and in the circumstances of the case and in law, the learned A grossly erred in confirming the alternative addition 4,09,70,600/ u/s. 56(2)(viib) of the ITA thereby rejecting of Rs 4,09,70,600/-
the valuation methodology adopted by the appellant for the M/s Unihealth Consultancy Ltd. 3 ITA No. 4387/MUM/2024 issuance of share and the confirmation of the same by CIT(A) is erroneous and is liable to be quashed.
b) On the fact and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the AO's rejection of the valuation method. In doing doing so, the learned AO erred by using hindsight to compare projections made at the time of share issuance with later events and results. This violates the principle that valuation should be based on information available at the time of issuance, not on subsequent subse events.
c) On the fact and in the circumstances of the case and in law, the learned AO and learned CIT(A) erroneously disregarded the appellant's valuation based on assumptions and presumptions which was in accordance with rule 11UA(2)(b) of the Inco Income Tax Rules, 1962.
d) On the fact and in the circumstances of the case and in law, the learned AO failed to appreciate that appellant had provided all necessary documents, including the valuation report, details to justify the FMV of of transactions, and supporting evidence, to shares. The learned AO and learned CIT(A) failed to adequately consider these documents and the appellant's legitimate claims.
e) On the fact and in the circumstances of the case and in law, the learned CIT(A) has completely ignored thethe decision of the Hon'ble Bombay High Court (Jurisdictional High Court) in the case of M/s. Vodafone M Pesa Ltd vs. Pr. CIT [2018] 92 M-Pesa taxmann.com 73 (Bombay).
f) On the fact and in the circumstances of the case and in law, the learned CIT(A)'s has affirmed the decision of Agro Portfolio (P.) LTD v. ITO [2018] 171 ITD 74 (Delhi -Trib.)Trib.) which has been explicitly overturned by the Hon. Delhi High Court in favour of the appellant. The appellant had duly highlighted the updated legal position in the submissions, which the learned CIT(A) has failed to acknowledge.
g) On the fact and in the circumstances of the case and in law, the learned CIT(A)'s has failed to apply the correct legal principles as established by the Hon. jurisdictional High Court and the Hon. Delhi hi High Court thereby resulted in an unjust addition to the appellant's income, ignoring the binding precedents that are in favour of the appellant.
3. Principal of Natural Justice M/s Unihealth Consultancy Ltd. 4 ITA No. 4387/MUM/2024
a) On the fact and in the circumstances of the case and in law, the learned CIT(A) has completely disregarded and ignored the submissions and evidence provided by the appellant during the appellate proceedings.
b) On the fact and in the circumstances of the case and in law, the learned CIT(A) failed to consider the detailed submi submissions and documentation provided by the appellant in support of its case. The appellant had submitted comprehensive evidence and legal arguments addressing all issues raised in the assessment order, which were crucial to the determination of the case.
c) On the fact and in the circumstances of the case and in law, the learned CIT(A) did not adequately address or even acknowledge the peculiar points raised in the appellant's submissions.
d) On the fact and in the circumstances of the case and in law, arned CIT(A)'s decision is contrary to the principles of equity the learned and due process, as it disregards the appellant's legitimate claims and evidentiary support. The failure to consider these submissions has resulted in an incorrect and unjust addition to the appellant's ppellant's income.
e) On the fact and in the circumstances of the case and in law, the order of the learned CIT(A) has been rendered in violation of the basic procedural requirements of adjudication, which requires a fair and thorough examination of all ma terial and arguments material presented by the appellant.
f) On the fact and in the circumstances of the case and in law, the learned AO erred in making an alternative addition u/s. 56(2)(viib) of the ITA which is inconsistent with established legal principles. The principle of making additions under a specific section, rather than multiple or alternative sections, is well established. Therefore, the alternative addition made u/s. 56(2)(viib) of the ITA is against the law.
2. Briefly stated, facts of the case are that, the assessee company that, was engaged in the healthcare consultancy services services, trading in medical equipment and hospital management services etc. For the year under consideration, the assessee filed return of income electronically on 30.11.2017 declaring tot total al income at M/s Unihealth Consultancy Ltd. 5 ITA No. 4387/MUM/2024 Rs.62,82,408/-.. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the tax act, 1961 (in short 'the Act') were issued and complied Income-tax with. During scrutiny proceedings, the Assessing Officer noticed share capital aggregating to Rs.4,20,00,000/ Rs.4,20,00,000/- comprising of equity capital both issued at a capital as well as preference share capital, premium. The equity and preference share capital had been issued in two tranches capital share) and ranches in November, 2016 (equity capital August, 2016 (preference share capital). The Assessing Officer noticed valuation reports report submitted by the assessee for the value of the equity shares and preference shares determining share price at Rs.799.90 and Rs.202.19 per share respectively from two different valuers applying discounting discount cash flow (DCF) method. In view of the vast difference in the valuation of the equity and preference share as within a short span, the Assessing Officer rejected the DCF assessee and himself valued the share on method employed by the assessee the basis of net asset value (NAV) method at Rs.13.44 per share. Accordingly, held the balance excess amount of the share premium received as taxable u/s 56(2)(viib) of the Act amounting to Rs.4,09,70,600/-.. Alternatively, the Ld. Assessing Officer also Alternatively, examined the genuineness of the entire share capital invoking section 68 of the Act. The Assessing Officer after analysing the documents filed by the assessee for discharging onus u/s 68 of the share capital including share premium amount Act, held the entire share of Rs.4,20,00,000/- as unexplained cash credit u/s 68 of the Act.
M/s Unihealth Consultancy Ltd. 6 ITA No. 4387/MUM/2024 In the computation to the assessment order, the Assessing Officer made addition for unexplained cash credit u/s 68 of the Act amounting to Rs.4,20,00,000/-
Rs.4,20,00 probably for the reason that addition for share premium u/s 56(2)(viib) of the Act subsumed in addition for share capital u/s 68 of the Act.
Act
3. On further appeal, the Ld. CIT(A) rejected the grounds of the assessee challenging the addition made u/s 56(2)(viib) of the Act as well as addition made by the AO invoking section 68 of the Act. The relevant finding of the Ld. CIT(A) in relation to the addition of Rs.4,09,70,600/- u/s 56(2)(viib) of the Act is reproduced as under:
"3. Discussions, Reason & De Decision:
3.1. The assessee's Return was assessed u/s. 143(3) on 29.12.2019. In the assessment order, the AO found that the assessee had raised preference shares, worth Rs. 65,00,000/-
65,00,000/ , by issue of 32,500 preference shares @ Rs. 200/-
200/ per share.
This issue was made in August, 2016. However, in the same Financial Year, in November, 2016 again, capital was raised , by issue of 44,375 nos. of shares, raising capital of Rs. 3,55,00,000/ . The value of shares issued, were @ Rs. 800/-
3,55,00,000/-. 800/ assessment stage, the AO asked for per share. During the assessment basis of the value of each share, issued as preference share and as regular share. The assessee during assessment stage submitted that the preference shares were issued, as per the valuation of a Chartered Accountant firm named, named, M/s. HP Jain & Associates, where, as per valuation report dated 30.11.2015, applying the Discounted Cash Flow Method (DCF), the value of each share was determined for Rs. 202.19 paise, per share. Such valuation was adopted while issue of shares. Again, before the issue of regular equity the preference shares.
shares, the shares of the Company were valued to know the Fair Market Value, per share, through another Chartered Accountant Firm, M/s. NP Lahoti & Co., who again, adopting the DCF Method, determined the Fair Fair Market Value of the shares at Rs. 799.90, each. 191 M/s Unihealth Consultancy Ltd. 7 ITA No. 4387/MUM/2024 3.2. In the assessment order, the AO analyzed the valuations made by two different valuers, on different dates, where the valuations differed by a great length. Thereafter, the AO was of the view that the Method adopted by the valuers on both occasions were flawed, especially, with regard to the projected cash flow, that was adopted for the valuations. He found that the variations of the actual cash flow and the projections made Therefore, the concluded that both the were far apart. Therefore, valuation reports, based on which new shares were issued by the assessee, were flawed. Thereafter, he himself, calculated the value of the shares by adopting Net Asset Value Method (NAV) by analyzing the assets and liabilities liabilities of the Company, as on 31/03/2016. By such Method, he came to the conclusion that the valuation of the shares should not exceed Rs. 13.44, per share. And therefore, he concluded that, out of the total raised capital of Rs. 4,20,00,000/-, 4,20,00,000/ , there was an overvaluation 4,09,70,600/ and made an addition of valuation by Rs. 4,09,70,600/-
such excess valuation, by adopting Sec. 56(2)(viib) of the Act.
3.3. Aggrieved with the order, the assessee instituted the present appeal. The assessee during the appeal proceedings, submitted that the AO did not have the right to discard the Valuation Method, adopted by them as, Rule 11UA of the Income Tax Rules clearly states that there is an option available with the assessee to adopt, either the DC Method or the NAV Method, for valuation of Market Value Value of shares, at their own choice. Moreover, it said that there had been a considerable time gap between the two valuation reports. The 1st of which was, on the date of November, 2015 and the 2nd one was of September, 2016. During the said period, the ojections were in favour of the assessee. Thus, there was a projections considerable increase in the valuation of the shares. The basis of such increase in valuation was also due to the new business plan of the assessee Company, to have branches in various countries o of Africa.
3.4. The logic submitted by the assessee was also submitted before the AO. However, the AO refuted such claim and stated that the actuals of FY 2016-17 2016 20 does not have to FY 2019-20 any bearing with the projections made. Therefore, the AO claimed that hat the valuation reports were not reliable at all and the variants had been adopted by the assessee only to match with the investments taken through private placements by a backward calculation, so that the end results are sought to be also not clear whether the valuers have achieved. It is also independently verified the claims made by the Management, regarding the future cash flow prospects.
M/s Unihealth Consultancy Ltd. 8 ITA No. 4387/MUM/2024 3.5. In the Vodafone M. Pesa Ltd. - Vs. - PCIT case, in a decision dated 01.03.2020, as reported in 92 taxmann.com 73, the Ld. Bombay High Court held that, as per the Rule 11UA, the assessee has the option to choose either of the two methods of valuation of DCF Method or NAV Method, for valuation of Market Value of the shares and the Department should not interfere in the Method of Valuation, taken by the assessee. In this case, the assessee chose the Valuation under the DCF Method and prima facie, the Department cannot not change the valuation from DCF to NAV Method, only for the shares, as per DCF fact that apparently the valuation of the shares, Method is resulting at a higher value.
3.6. However, in the case of TUV Rheinland NIFE v. ITO [IT Appeal No. 3160 (Bang.) of 2018 dated 27 27-2-2019] 2019] while dealing with this issue, the Hon'ble Bangalore Income-tax Income upheld the order of the Id. AO, who Appellate Tribunal (ITAT) upheld had rejected the DCF method of valuation adopted by the company and made addition under section 56(2) taxpayer-company (viib) of the IT Act, based on the NAV method. In the facts of this case, the taxpayer taxpayer-company had issued shares es to its parent Company at a premium and it had relied on the DC method to determine FMV for justifying the premium. The Id. AO, upon examining the valuation report concluded that the valuation report had solely relied on the values provided by the Management ment of the taxpayer-company, taxpayer company, which were adopted to arrive at the FMV to justify the high premium. The Id. AO recomputed the FMV of the shares of the taxpayer taxpayer- company using the NAV method and made relevant additions, which were upheld by the Id. Commissioner er of Income-tax Income (Appeals) (CIT(A)). The Hon'ble ITAT paid heed to the argument of the taxpayer-company taxpayer company that it has the statutory right to select either one of the two methods prescribed for the purposes of section 56(2) (viib), one of them being the DCF ethod. In addressing this argument as well as the contention method.
that the right of a Id. AO was limited to verifying the arithmetical accuracy of the method selected by the taxpayer-
taxpayer company, the Hon'ble ITAT clarified that the Id. AO had not questioned the right rig of the taxpayer-company company to choose the method of valuation, but after examining the projections,, he had questioned the numbers - its basis, veracity, accuracy. The Hon'ble ITAT noted that the estimates and projections used by the taxpayer taxpayer-company were 'a a long distance from reality' and the taxpayer taxpayer- company, despite repeated requests, had failed to produce and substantiate the basis for such estimates and projections. Thus, in absence of any valid and meaningful justification for the projections considered consider and M/s Unihealth Consultancy Ltd. 9 ITA No. 4387/MUM/2024 adopted in determining FMV under the DCF method, the Hon'ble ITAT agreed with the decision of the Id. AO to deploy NAV method. In doing so, the Hon'ble ITAT thus upheld the authority of the Id. AO to override the choice of valuation method adopted under u certain circumstances, 3.7. Again, Hon'ble Delhi ITAT in case of Agro Portfolio (P.) Ltd. v. ITO [2018] 94 taxmann.com 112/171 ITD 74, held that in the facts of this case in the event the Id. AO had any inhibition or doubt about the valuation adopted by the taxpayer, he may make a reference to the Valuation Officer of the Department to verify the veracity of such valuation. However, in a situation where the taxpayer company fails to substantiate the taxpayer-company projections adopted to determine the FMV as per DCF method, m it may not be possible even for the Departmental valuation officer to verify the correctness of such valuation adopted. Accordingly, the Hon'ble ITAT added that in such cases, the Id. AO may be forced to reject the DCF method, since the same cannot be verified and instead, could adopt the NAV method to determine the liability of the taxpayer under section 56(2)(viib) of the IT Act.
3.8. Respectfully following the above quoted decisions, I find the action of the AO to be completely justified by adopti adopting valuation of the shares through NAV Method and making the 4,09,70,600/ , u/s. 56(2)(viib). Therefore, the addition of Rs. 4,09,70,600/-, addition made by the AO is upheld and the Ground of Appeal of the assessee is rejected."
rejected.
3.1 Regarding the addition u/s 68 of the Act Act amounting to Rs.4,20,00,000/- in relation to en entire t tire share capital, the finding of the Ld. CIT(A) is reproduced as under:
4.1. As an alternative action, the AO found that even "4.1.
otherwise, the creditworthiness of the so called investors in so-called the shares of tthe Company is not well-established.
established. Therefore, he proposed that the amount of share capital raised by the assessee, through such individual shareholders were not explained properly and therefore, as an alternative action, he proposed to treat the amount of Rs. 4,20,00,000/-
4,20,00,000/ as Unexplained Cash Credit, u/s. 68 of the Act.
4.2. The assessee submitted that all the shareholders were genuine tax payers and during the assessment stage, the assessee discharged its onus by filing complete details of the M/s Unihealth Consultancy Ltd. 10 ITA No. 4387/MUM/2024 investors. Therefore, it should not be penalized by treating such investment as bogus.
4.3. The explanation of the assessee is not completely acceptable. It is true that the assessee had submitted details of the investors. However, it was also found by the AO, by independently ependently making enquiry with such investors, that their creditworthiness was at serious doubt. It is also to be mentioned that, out of 10 investors, at least 3 of them did not respond to the notices of the AO, to explain the source of their made in the Company's shares. Regarding, the investment, made other 7 shareholders, it was found by the AO that, in certain cases, the investors received funds from entities, which were channelized as investment in shares of the assessee Company, whereas, those third-party third entities actually received the sum lent to the investors by assessee itself.
4.4. Considering the facts of the case, I do not want to interfere in the findings of the AO and hold that the alternative proposal of the AO, also holds good. However, as proposed propose by the AO in the assessment order, I hold the substantive 4,09,70,600/- to be more logical and backed by addition of Rs. 4,09,70,600/ proper judicial reference. Therefore, the addition of Rs. 4,09,70,600/ is held to be the addition, to be made in this 4,09,70,600/-
case. However, the addition of Rs. 4,20,00,000/- is held to be a proper addition, for statistical purpose and the Ground of Appeal of the assessee is dismissed."
dismissed.
4. Before us, the Ld. counsel for the assessee has filed a Paper Book containing pages 1 to 1297.
4.1 s.. 1(a) to 1(e) are in relation to section 68 of the The ground Nos Act. In the grounds raised, the assessee is aggrieved with the sustaining of the disallowance of Rs.4,20,00,000/-
Rs.4,20,00,000/ in respect of entire equity and preference share capital received by the assesse assessee during the year under consideration, consideration which has been held as unexplained cash credit by the lower authorities. It is the contention of the Ld. counsel for the assessee that the assessee has filed all the documents regarding the identity, creditworthiness and M/s Unihealth Consultancy Ltd. 11 ITA No. 4387/MUM/2024 genuineness of the transaction in respect of share capital received. The Ld. counsel submitted that the assessee had already filed profile, identity proof, income tax return and bank account income-tax statement of all the share applicants but the Ld. Assessing Officer O has not discharged his onus. He submitted that as s the assessee has already discharged his burden of proof u/s 68 of the Act by way of submitting the required documents, the lower authorities are not justified in sustaining the addition of the entire share capital as unexplained cash credit. On the other hand, the Ld. Departmental Representative (DR) relied on the order of the lower authorities.
4.2 We have heard rival submissions of the parties and perused record The brief facts qua the issue in the relevant materials on record.
dispute are that the assessee received share capital by way of equity and preference shares from few subscribers. The Assessing Officer d notice u/s 133(6) of the Act to the subscribers calling for issued information from them regarding regarding source of the funds, funds but only explanation was received from the part of the subscribers. The T information received was also not found to be sufficient by the Assessing Officer. The Assessing Officer has reproduced a chart of the information filed and def deficiency iciency noticed. For ready reference the relevant chart is reproduced as under:
Name Bank account details Observations Ms. Mayuri Akshay ICICI Bank A/c No. The amount of Rs. 55,00,000/-
55,00,000/ invested has Parmar 026101512739 been provided by bank transfers from one M/s Matushree Marketing (Rs. 23,00,000), M/s Unity Engineering (Rs. 3,00,000)(which is a family promoted company of Mr. M/s Unihealth Consultancy Ltd. 12 ITA No. 4387/MUM/2024 Akshay Parmar) and Mr. Akshay Parmar (Rs. 26,30,000). Besides the transfers from these accounts, the account ppear to be creditworthy balance does not appear of an investment of the considered sum. Ms. Nikita Punamiya Union Bank, A/c No. The amount of Rs. 50,00,000/-
50,00,000/ invested on 381402010003544 02.11.2016 has been entirely provided by jointly held with Mr. V one M/s Ratanchand and Dalichand (which is a C Gandhi) Pune based jeweller firm) on 01.11.2016 i.e. just one day before the investment. Besides this receipt of money, the account does not suggest i creditworthiness of an investment of the considered sum. The capital account has not beenbe submitted in support.
Mr. Rahul Union Bank, A/c no. Out of the amount of Rs. 55,00,000/ 55,00,000/-
Vimalchand Gandhi 381402010905537 381402010905537 invested on 28.10.2016, an amount of Rs. 5,00,000/-
5,00,000/ has been received on the same day from M/s G Data Process. Bank statement for the earlier period has not been provided by the assessee to verify the source of funds for the remaining amount. The capital account has not been submitted in support.
Mr. Santosh Mehta Union Bank, A/c No. The amount of Rs. 1,00,00,000/ 1,00,00,000/-invested on 318005040034242 in 28.11.2016 by Mr. Santosh Mehta has been the name of M/s received back from the assessee company Mehta Emporium by M/s Mehta Emporium Jewelers on Jewellers 01.12.2016 and has been further transferred to Mr. Santosh Mehta on 02.12.2016. The capital account has not been submitted in support. Ms. Swati Gandhi Union Bank, A/c no. An amount of Rs. 10,00,000/ 10,00,000/- is received 381402010905538 from M/s Dariyav Himmatlal Enterprises on 24.08.2016, and one day later transferred sessee company on 25.08.2016.
to the assessee Besides this amount, the account does not suggest creditworthiness of the size of the considered investment. The capital account has not been submitted in support.
Ms. Vasanti Union Bank, A/c No. On the same day that the amount is Vimalchand Gandhi 381402010905551 invested in the assessee company, i.e. 15.11.2016, of Rs. 10,00,000/-
10,00,000/ there is a cash deposit of Rs. 2,00,000 and a transfer from another account of an amount of Rs. 10,00,000/-.. Further, earlier on 28.10.2016, 28.10.
an investment of Rs. 20,00,000/-
20,00,000/ is made in the assessee company, which had come from Mr. Vimalchand Gandhi on the same day. Besides the above sources, the account does not show any creditworthiness. The M/s Unihealth Consultancy Ltd. 13 ITA No. 4387/MUM/2024 capital account has not been submitted in support.
Rajendra Kothari Bank statement not In the absence of the bank statement, the
(NRI) submitted nature and source of the investments made
in the assessee company remains
unexplained. The capital account has not been submitted in support.
Vimalchand Gandi Punjab National Bank, The bank statement submitted does not 0387000100063059 explain the source of the funds invested nor has the assessee explained the same in the reply to the notices issued u/s 133(6) of the Act.
Naitik Chinubhai Nothing susubmitted by No reply received to the notice issued to u/s Shah the assessee to 133(6) of the Act.
explain the nature and
source of the
investments
Manthan Chinubhai Nothing submitted the u/s 133(6) of the Act
assessee to explain
the nature and source
of the investments
4.1 We find that the Assessing Officer has mainly noted that the assessee had only filed bank statement but did not file evidence in support of creditworthiness including the copy of the capital account in case of three parties namely Shri Vimalchand Gandhi, Naitik Chinubhai Shah, Manthan Chinubhai Shah.
Shah Further, no reply of the notice u/s 133(6) of the Act was received in three cases and also no efforts were made de by the assessee to remove those o noted that funds deficiencies before the Ld. CIT(A). The AO also were received in the hands of subscribers from their family concerns just one or two days before investment. Before us, the assessee has filed a copy of the documents filed before the lower authorities. We find that the assessee had filed balance sheet and other financial statement in the case of Mrs Mayuri Akhsya Parmar , a copy of which is available on page 997-998 997 998 of paper book.
M/s Unihealth Consultancy Ltd. 14 ITA No. 4387/MUM/2024 Similarly, balance sheet alongwith capital account in the case of subscriber er Nikita Dinesh Punmiya is available on page 1001N to 1001O of the paper book. Balance sheet along with capital account in the case of smt. Santosh V Mehta is available on page 1008 to 1009 of paper book. Similarly balance sheet and capital account in e of other subscribers are available in paper book filed before us. case Evidently, the Assessing officer has not verified the documents filed properly for verification of creditworthiness of the parties. Thus the e those deficiencies question arises whether is it possible to remove pointed out by the Assessing Officer? In our opinion, opinion when the subscribers are filing their regular return of income, balance sheets etc,, and all such details have been filed before us, then it may not creditworthiness. In view of the facts be difficult to ascertain their c and circumstances of the case and in the interest of substantial of justice, we are of the opinion that assessee should be provided one more opportunity to discharge his onus u/s 68 of the Act justifying ditworthiness and genuineness of the transaction. If identity, creditworthiness required so, the Assessing Officer may also carry out inquiry as deemed fit in the facts and circumstances of the case including subscribers.. Accordingly, we restore the issue examining the share subscriber in dispute of addition u/s 68 of the Act to the file of the Assessing afresh. It is needless to mention that assessee Officer for deciding afresh.
shall be provided adequate opportunity of being heard.
heard The ground no. 1 of appeal is accordingly allowed for statistical purposes. Since the issue of addition u/s 68 of the Act is restored back to the file of M/s Unihealth Consultancy Ltd. 15 ITA No. 4387/MUM/2024 the Ld. Assessing Officer, we are not adjudicating upon the alternative ground raised by the assessee for addition u/s 56(2)(viib) of the Actt at this stage as first the assessee has to cross the barrier of section 68 of the Act and if the assessee succeeds then only need for examining liability of section 56(2)(viib) of the Act would arise.
arise The ground No. 2 is accordingly also restored back to the file of the Assessing Officer for deciding along with the grounds related to addition u/s 68 of the Act. In view of the matter already restored the ground No. 3 is also back to the file of the Assessing Officer, the rendered infructuous, tuous,.
5. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced nounced in the open Court on 29/01/2025.
/01/2025.
Sd/- Sd/
Sd/-
(SANDEEP SINGH KARHAIL)
KARHAIL OM PRAKASH KANT)
(OM KANT
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai;
Dated: 29/01/2025
Rahul Sharma, Sr. P.S.
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
BY ORDER,
//True Copy//
(Assistant Registrar)
ITAT, Mumbai