Go Fashion (India) Ltd. vs. The Principal Commissioner of Income Tax

Parties Involved

Facts Summary

Go Fashion (India) Ltd. issued compulsory convertible preference shares at a price of Rs. 416.69 per share against the Fair Market Value (FMV) of Rs. 414. The Assessing Officer did not make any addition under section 56(2)(viib) for the difference in issue price and FMV of shares. The Principal Commissioner of Income Tax (PCIT) set aside the assessment order, holding that the Assessing Officer had not made complete verification and inquiry in respect of consideration received by the assessee in excess of FMV to be charged as income from other sources under section 56(2)(viib) of the Act. The assessee appealed against the order of the PCIT.…

Legal Issues

• 1. Whether the order of the PCIT is opposed to law and the facts and circumstances of the case.
• 2. Whether the order of the PCIT is void ab-initio for not mentioning specific grounds for initiating action under section 263 of the Income Tax Act, 1961.
• 3. Whether the order of the PCIT is void ab-initio for not passing a speaking order against all the submissions of the appellant.
• 4. Whether the order under section 263 is merely a 'change in opinion' and the order under section 143(3) passed by the Assessing Officer is not erroneous.
• 5. Whether the order under section 263 is not for the reason that the Assessing Officer has not made inquiries or verification.
• 6. Whether the order under section 263 has not properly appreciated sub-rule 4A of Rule 11UA of the Income Tax Rules.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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