In ITA No. 4895/DEL/2019, BLP Vayu (Project-1) Pvt. Ltd., based in Gurgaon, appeals against the revisional order passed by the Principal Commissioner of Income Tax (Pr.CIT), Gurgaon, which targeted the share premium received during the Assessment Year (AY) 2014-15.
The case centers around the revisional powers of the Pr.CIT, who alleged that the share premium received by BLP Vayu (Project-1) Pvt. Ltd. was not thoroughly examined by the Assessing Officer (AO) and thus was deemed erroneous and prejudicial to the interest of the revenue.
BLP Vayu (Project-1) Pvt. Ltd. issued shares at a significant premium during AY 2014-15, which was scrutinized under Section 263 of the Income Tax Act by the Pr.CIT. The primary contention was that the AO failed to adequately verify the creditworthiness of the share transactions and the genuineness of the share premium, leading to the revision order.
The company argued that all transactions were transparent and in compliance with financial regulations, highlighting that the funds were received from a legitimate holding company with substantial business operations. The tribunal recognized that the initial assessments by the AO, which had accepted the company’s declared transactions without adjustments, did not exhibit any anomalies warranting a revision.
The tribunal ruled in favor of BLP Vayu (Project-1) Pvt. Ltd., stating that the Pr.CIT’s revision under Section 263 was unjustified. This decision emphasized the necessity for tax authorities to provide substantial evidence before altering any assessed income. The order reinstated the original assessment, marking a significant victory for the company.
This case serves as a crucial example of the checks and balances within the tax assessment process, ensuring that revisional powers are exercised with due diligence and just cause.
BLP Vayu (Project-1) Pvt. Ltd. Challenges Revision Order on Share Premium in ITA 4895/DEL/2019
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