IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER (Assessment Year : 2014–15)

Tajshree Autowheels Pvt. Ltd.

P. no.9, Tajshree Varsha Khamla Road, Deo Nagar ……………. Appellant Vivekanand Nagar, Nagpur 440 015 PAN – AACT5025D v/s Asstt. Commissioner of Income Tax ……………. Respondent Circle–4, Nagpur Assessee by : Shri Madhav Vichore Revenue by : Shri Abhay Y. Marathe Date of Hearing – 10/02/2025 Date of Order – 04/03/2025

O R D E R

PER K.M. ROY, A.M.

This appeal by the assessee is emanating from the impugned order dated 15/02/2023, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2014–15.

2. The assessee has raised following grounds:–

“1. On the facts and circumstances in the law, the Learned CIT(A) erred in dismissing the appeal of assessee thereby confirming the order of AO whereby AO has added Rs.32,26,000 under provisions of Section 56(2)(viib) of the Act. 2. On the facts and circumstances in the law, the Learned CIT(A) erred to hold that receipt of share premium of Rs.1,00,00,000 by allotting 2,00,000 shares each of face value of Rs.10/ at a premium of Rs.40 is not based on actual valuation and therefore genuineness of the same is not established.

3. On the facts and circumstances in the law, the Learned CIT(A) erred to hold that projection of financials as per the valuation report furnished by the assessee is not backed by any cogent evidence and the said report suffers from serious deficiencies and thus not reliable.

4. On the facts and circumstances in the law, the Learned CIT(A) further erred to hold that shares were overvalued at the time of allotment considering actual potential of company.

5. On the facts and circumstances in the law, the Learned CIT(A) erred to give aforesaid observation without considering the judicial pronouncements which inter–alia held that AO or the authorities are not the experts of the such matters and hence they cannot reject any expert certificate without cogent reasons and cogent evidences.

6. On the facts and circumstances in the law, the Learned CIT(A) erred to confirm the action of AO of addition to income on said grounds without realizing the purpose of such antiabuse provisions and Circular of CBDT without considering that shares were allotted to existing directors only and all are assessed to tax since past.

7. On the facts and circumstances in the law, the Learned CIT(A) erred to disregard the provisions of section 56(2) (viib), about occurrence of deeming income under said section, which is only at the time of receipt in any previous year (being consideration for issue of shares that exceeds the face value of such shares) and disregarding the facts and circumstances of instant case where share application money was received by banking channel in the month of March 13 and was also reflected in balance sheet of said for financial yea 2012-13 as the pending share application money and allotment of shares has only occurred in F.Y.2013-14 relevant to current AY 14-15.

8. On the facts and circumstances in the law, the Learned CIT(A) erred to confirm the action of AO to tax the money in the current AY 2014-15 at the time of allotment whereas taxability requires to be scrutinized in the AY

2013-14 that at time of receipt of money.

9. On the facts and circumstances in the law, the Learned CIT(A) erred to not consider the decision of Apex court in Bengal Immunity Co Ltd. v/s State of Bihar that "legal fictions are created only for some definite purposes and legal fiction is to be limited to the purpose for which it was created and cannot extended beyond legitimate field". And decision of the M.P High Court in CIT v/s Choteau Kanhaiyalal (80 ITR 56) which held that statutory fiction could be carried to its logical conclusion but the fiction cannot be extended beyond the language of the section by which it is created or by importin