2021 (12) TMI 881

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....n Ponds (India) Limited at the time of its incorporation in 1977. Petitioner was allotted further 1,59,250 equity shares of Rs. 10/- of Ponds (India) Ltd by way of a rights issue at Rs. 90/- per share in 1987. Petitioner was issued 51,39,75,000 equity shares of Rs. 1/- each by way of bonus shares from time to time. Upon merger of Ponds (India) Ltd. with Hindustan Lever Ltd. and thereafter, petitioner was holding 6,00,86,250 shares of Rs/1/- each of Hindustan Lever Ltd. in the following manner:   (i) 63,00,000 equity shares of Rs. 1 in lieu of the original 4,20,000 equity shares of Rs. 10 each held by petitioner in Ponds (India) Ltd.   (ii) 2,388,750 equity shares of Rs. 1/- received by petitioner against 159,250 equity shares ....

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....arch 2008 proposing to re-assessing the income of petitioner for A.Y.-2004-2005 on the alleged belief that the income escaped assessment within the meaning of Section 147 of the Act. 7. We have perused the reasons for re-opening which was provided to petitioner by respondent no.2 vide a letter dated 11th September 2008. The main contentions of respondent no.2 are: i) petitioner has admitted to the working of capital gains without considering the benefit of first proviso to Section 48; and ii) tax had to be calculated @ 20% against 10% determined while passing the assessment order. Thereafter, by its letter dated 29th September 2008, petitioner filed its objections to the notice of proposed re-assessment and also attended a personal hearing....

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....ccordingly. It is also clear that in so doing, Assessing Officer examined all the relevant provisions of the Act including Section 48 and Section 112 of the Act and completed the assessment by applying the rate of income tax as per proviso to Section 112(1) of the Act. It is also clear from the reason that during the assessment proceedings, Assessing Officer had asked why capital gain should not be taxed @20% as provided under Section 112(1)(c)(ii) and in response to the said query, petitioner vide letter dated 10th November 2006 submitted explanation and revised (without prejudice) working of the capital gain without considering the benefit of first proviso to Section 48. It is also clear from the reasoning given by respondent no.2 that th....

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....there was a decision of the ITAT-Mumbai where, it was opined that income of a non-resident by way of capital gain is taxable by rate of 20%. As held in First Source Solutions Limited V/s. The Assistant Commissioner of Income Tax - 12(2) (1) and Anr. 438 ITR 139 and followed by this court's order in Ananta Landmark Ltd. Vs. Deputy Commissioner of Income Tax Central Circle 5 (3) & Ors. 2021 (131) taxmann.com 52(Bom) the reasons of re-opening the assessment has to be based / examined only on the basis of reasons recorded at the time of issuing a notice under Section 148 of the Act seeking to re-open the assessment. These reasons cannot be improved upon and/or supplemented much less substituted by an affidavit and/or oral submissions. 12. ....