TaxTMI 
TaxTMI 
2016 (7) TMI 258
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....d in the circumstances of the case and in law, in confirming the addition of Rs. 2,00,000 (representing 1000 sweat equity shares of Rs. 10 each issued at premium of Rs. 190 each); 3. That the Learned CIT(Appeals) has erred on the facts and in the circumstances of the case and in law, in confirming that shares issued as "sweat equity shares" is income of assessee under section 28(iv). 4. That the Learned CIT(Appeals) has erred on the facts and in the circumstances of the case and in law in confirming the value of shares issued as "sweat equity shares" at Rs. 200 per share. 5. That the Learned CIT(Appeals) has erred on the facts and in the circumstances of the case and in law in confirming that the conditional issue....
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....t was framed under sec. 147/143(3) of the Act and addition of Rs. 2 lacs was made under sec. 28(iv) of the Act on the basis that 1000 shares of face value of Rs. 10 and premium of Rs. 190 were issued to the assessee. The Learned CIT(Appeals) has upheld the same against which the assessee is in appeal on the above ground. 4. Ground No.1: In this ground, the assessee has questioned validity of reopening of the assessment. In support of this ground, the Learned AR submitted that the Assessing Officer has assumed jurisdiction under sec. 147 of the Act on the basis of facts which are not in existence on the date when the reasons for assuming jurisdiction were recorded. He submitted that sweat equity shares is defined under sec. 79A of the Com....
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....2011 and search under sec. 132 of the Act was conducted at the premises of the RLH on 6.9.2011. Thus, it is clear that by the time search took place on RLH the so called shares were never in existence and the value as mentioned in the reasons recorded was already vanished in view of the order of the Hon'ble High Court. Therefore, the material which came into the possession of the Assessing Officer was vague and was having no direct nexus with the belief entertained by the Assessing Officer. It is settled position of law that for invocation of reopening proceedings under sec. 147 of the Act, material should be specific and has bearing on the belief entertained by the Assessing Officer while recording his reasons. The Learned AR referred ....
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....ermitted on the basis of material found in the course of search, then the provisions of sec. 153 would be redundant. In this regard, he placed reliance on the following decisions to support his above contentions that no action under sec. 147 is permissible on the basis of material found in search: i) ACIT vs. Arun Kapur - 140 TTJ 249 (Amritsar); ii) Cargo Clearing Agency vs. JCIT - 307 ITR 1(Guj.); 6. The Learned Senior DR on the other hand tried to justify the action of the Assessing Officer in initiating reopening proceedings. He submitted that the Assessing Officer was in possession of specific information that sweat equity shares in the hands of the assessee was taxable under section 28(iv) of the Act. The Assessing....