2023 (2) TMI 427

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....ment year 2015-16 as also the order dated 08th March, 2022 rejecting the objections raised by the Petitioner regarding the reopening of the assessment proceedings. 2. The reasons for reopening are as under: The reasons for reopening is that the Petitioner had issued premium of Rs.17 per share, which was not valued correctly in terms of Rule 11UA r/w Section 56(2)(viib) of the Act and that the correct valuation of equity shares as per the aforesaid rule worked out at Rs.6.48 per share. It was thus stated that an amount of Rs.1,68,30,000/- received as premium was required to be added as income from other sources. The reasons also reflect that the assessee had failed to disclose truly and fully the material facts and, therefore, th....

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....d 08th November, 2017 came to be passed. 3. Learned Counsel for the Petitioner therefore urged that there was no failure on the part of the Petitioner to disclose fully and truly the material facts during the assessment proceeding and that the reopening of assessment proceeding was nothing but a change of opinion. 4. Section 56(1) of the Income Tax Act envisages that the income of every kind which is not to be excluded from the total income under the Act shall be chargeable to income tax under the head "Income from other sources" if it is not chargeable to income tax under any of the heads specified in Section 14, items A to E. 5. In terms of Section 56(2)(viib), this Section also brings inter alia within its ambit, a case where a ....

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.... Rule 11UA(2)(b) i.e. the Discounted Free Cash Flow Method as certified by the C.A. and, therefore, the Petitioner cannot be said to have not disclosed facts fully and truly only because, it had adopted a particular method of determining the fair market value of the shares which was otherwise permissible. The issue with regarding to the valuation of the shares was indeed a subject matter of scrutiny by the A.O. during the assessment proceeding, which was responded to by the Petitioner leading to the passing of the order of assessment dated 08th November, 2017. For purpose of facility of reference, Rule 11UA(2) is reproduced as under to show that it did provide such an option to the assessee. "Notwithstanding anything contained i....

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....ew and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But reassessment has to be based on fulflment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1-4-1989, Assessing Officer has power to re-open, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief......" 11. In fact, the Supreme ....