TaxTMI 
TaxTMI 
2021 (8) TMI 1166
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....ion of Rs. 1,50,00,000/- (a) by making certain observations in the concluding para which reflect suspicion in his mind and which were never confronted to the Appellant during appellate proceedings and (b) by assuming and suspecting various facts and also by indirectly expecting to know from the Appellant (without specifically demanding the same during appellate proceedings) the source of the source of the share holder companies who subscribed to the shares of the Appellant company. 3. On the facts and circumstances of the case and in law, the Appellant humbly submits that (a) since the promoter director of the Appellant Company who was instrumental in negotiating and obtaining share capital from the said three share holder companies expired on 6th February 2011 and (b) further since the Appellant Company is in non-operational state after his demise the present directors were finding it extremely difficult to extract further information from those three share holder companies and provide further information in appellate proceedings and hence the Appellant urges the honourable Tribunal to restore the matter to AO or CIT (A) to kindly afford the Appellant Company one more opp....
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....and served on the assessee. Reasons for reopening the assessment were also provided to assessee during the course of assessment proceedings. The reasons for reopening the assessment are reproduced as under: The return of income for AY 2009-10 was filed on 29.3.2010 declaring total income of Rs.NIL. The return was processed u/s 143(1) of the Act. On perusal of the information available on record and information received from the office of the CCIT(CCA), Mumbai it is noticed that the assessee during the previous year relevant to AY 2009-10 has issued 75000 shares on premium, the face value for which is Rs. 10/-. The premium amount received on cash amounts to Rs. 1,42,50,000/~, which comes to Rs. 190/- per share. On going through the balance sheet and P&L A/c of the assessee for YGBP.31,03.2008 and YE 31.3.2009, the intrinsic value of the shares are much less to command such a huge amount of premium and the purported transactions were not genuine. In view of the same, I have reason to believe that the nature of the transaction is note genuine. Hence, in view of the above. I have reason to believe that the premium of Rs. WO/- per share received is unreasonabl....
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....validity of reopening by observing as under:- 5.1. The first ground of appeal is against the re-opening of the assessment. It has been argued that there is no reason to believe that income had escaped assessment. There is no material that has come to the knowledge of the AO for forming the belief. The AO has not formed any belief of his own and the same is only on the basis of the information from CCIT (CCA). There is no incriminating material which could suggest that the share premium of Rs. 1,42,50,000/- is unexplained cash credit. The requirement of law is there must be "reason to believe" and not "reason to suspect". 5.2. I have considered the submissions carefully. This is not a case where there was any previous order u/s 143(3} where this issue was examined. The reasons recorded were communicated to the appellant. Objections raised were disposed by the assessing officer. It is trite law that before issue of notice u/s 148, the assessing officer has only to formed a reason to believe that income has escaped assessment. This need not be proved to the hilt. It is up to the assessee to rebut this belief with evidence. The aspect of issue of shares at huge premiu....
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.... did not find any merit in the submissions of the assessee that the merits fall within the scope of section 68. He referred to several case laws as under:- (i) N.Tarika Proprty Invest.(P.) Ltd. v CIT [2014] 51 taxmann.com 387(SC) (ii) CIT v. Sophia Finance Ltd. [1994] 205 ITR 98/[1993] 70 Taxman 69 (Delhi) (iii) CIT vs. Steller Investment Ltd. [1991] ITR 287/59 Taxman 568 (Delhi) (iv) CIT v. Lovely Exports Ltd. [2008] 299 ITR 268. (v) CIT v. Nova Promotoers & Finlease (P.) Ltd. (vi) CIT v. Nipun Builders & Developers [2013] 350 ITR 407/214 Taxman 429/30 taxmann.com 292 (Delhi) (vii) CIT v. N.R.Protfolio (P.) Ltd. [2014] 222 Taxman 157/42 taxmann.com 339 (Delhi) 12. Thereafter, Ld.CIT(A) concluded as under;- 6.9. Thus, it can be safely concluded that even in case of credit appearing as share capital and premium, section 68 can be invoked in the case of a private limited company. 6.10. In the course of appellate proceedings the Lei AR was asked to furnish the current address of the appellant, evidence of credit worthiness and genuineness of the transaction in respect of the investments received, and d....
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....gandeep Infrastructure(P.) Ltd. has duly held that such addition cannot be brought to the tax for AY prior to AY 2012-13. Hence. Ld. Counsel pleaded that prior to the insertion of the concerned statute, there was no issue of taxing unjustified share premium and hence, it cannot be a reason for reopening. Hence, he submitted that reopening is bad. 16. He further submitted that assessee has duly submitted all the documentary evidence and necessary documents, which are as under:- 1) Details of Shares allotted by the assessee company alongwith share premium received 2) Copy of supporting documents for the allottee parties. a) Copy of share application form b) Copy of acknowledgment of income. c) Copy of computation of income d) Copy of balance sheet. e) Copy of Bank statement for payments made by them 3) Form 2 filed with ROC for allotment of aforesaid shares. 17. Hence, Ld. Counsel submitted that assessee has duly discharged its onus. He submitted that there is no finding by the authorities below that on examination of the documents, the creditworthiness of the parties has not been found to be in order. More....
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....bunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced "for removal of doubts" or that it is "declaratory". Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming the pre proviso Section 68 of the Act laid down by the Courts namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned order of the Tribunal and on facts it was found satisfied. (ii) Further it was a submission on behalf of the Revenue that such large amount of share premium gives rise to suspicion on the genuineness (identity) of t....